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ACC 291 Week 2 – Fordyce and Atwater
P10-5A
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Check My Assignment!Fordyce Electronics issues a $400,000, 8%, 10-year mortgage note on December 31, 2007. The proceeds from the note are to be used in financing a new research laboratory. The terms of the note provide for semiannualinstallment payments, exclusive of real estate taxes and insurance, of $29,433. Payments are due June 30 and December 31.
Complete the installment payments schedule for the first 2 years. (Round answers to 0 decimal places, e.g. 125. Use rounded amounts for future calculations.)
Prepare the entries for (1) the loan and (2) the first two installment payments. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3,
2.) Show how the total mortgage liability should be reported on the balance sheet at December 31, 2008.
P10-6A
On July 1, 2011, Atwater Corporation issued $2,098,000 face value, 12%, 10-year bonds at $2,507,354. This price resulted in an effective-interest rate of 9% on the bonds. Atwater uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest July 1 and January 1.
Prepare an amortization table through December 31, 2012 (3 interest periods) for this bond issue.
Prepare the journal entry to record the accrual of interest and the amortization of the premium on December 31, 2011
Prepare the journal entry to record the payment of interest and the amortization of the premium on July 1, 2012, assuming no accrual of interest on June 30
