Answer:
d. $14,747,642
Explanation:
For computing the carrying value of the bonds , first we have to determine the discount amortization for 3 years which are shown below:
= (Issued amount - proceeds from the bonds) ÷ time period × number of years
= ($15,000,000 - $14,703,109) ÷ 20 years × 3 years
= $44,533.80
Now the carrying value would be
= Proceeds from the bonds + discount amortization for 3 years
= $14,703,109 + $44,533.80
= $14,747,642
Answer:
a. Insurance expense for the month of march
= ($3,840 / 12 months) * 1 month
= $320 per month
b. Balance in prepaid insurance as of March 31
= ($3,840 / 12 months) *11 months remaining
= $3,520
c. Equipment rent expense for the month of April
= ($23,160 / 24 months) * 1 month
= $965
d. Balance in prepaid equipment rental as of April 30
= Nil ($0) as it is not mentioned that payment has been made, it is only mentioned that two year rental contract has been entered into.
Answer:
Interest expense and a gain.
Explanation:
US GAAP allows companies to report their financial assets or financial liabilities at their fair market value, this is called the fair value option.
If interest rates increase, and of course the coupon rate is fixed, then they value of bonds will decrease. The same logic applies to bonds sold at a discount.
In this case, the company must report an interest expense in the income statement regardless of what happens to the interest rate, since the company must pay the coupon rate.
Since the price of the bonds decreased, then the company's liabilities (bonds payable) decrease, so the company must report a gain = bond's previous value - bond's current value
Answer:
Debit Fees Revenue and credit Income Summary for $10,000
Explanation:
The journal entry for recording the closing the revenue account is as follows
Fees revenue Dr $10,000
To Income summary $10,000
(Being the closing of revenue account is recorded)
For recording this we debited the fees revenue and credited the income summary so that the correct recording and posting could be done