Net Work Corporation, whose annual accounting period ends on December 31, issued the following bonds: Date of bonds: January 1, 2018 Maturity amount and date: $420,000 due in 10 years (December 31, 2027) Interest: 10.0 percent per year payable each December 31 Date issued: January 1, 2018

Required: For each of the three independent cases that follow provide the following amounts to be reported on the January 1, 2018, financial statements immediately after the bonds were issued: (Deductions should be indicated by a minus sign.) Case A (issued at 100) Case B (at 96 Casec (at 104) January 1, 2018-Financial Statements: a. Bonds payable b. Unamortized premium (discount) c. Carrying value

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Tessie

Business

5 August, 09:09

Net Work Corporation, whose annual accounting period ends on December 31, issued the following bonds: Date of bonds: January 1, 2018 Maturity amount and date: $420,000 due in 10 years (December 31, 2027) Interest: 10.0 percent per year payable each December 31 Date issued: January 1, 2018

Required: For each of the three independent cases that follow provide the following amounts to be reported on the January 1, 2018, financial statements immediately after the bonds were issued: (Deductions should be indicated by a minus sign.) Case A (issued at 100) Case B (at 96 Casec (at 104) January 1, 2018-Financial Statements: a. Bonds payable b. Unamortized premium (discount) c. Carrying value

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Alfred · Answer 1

The following amounts to be reported on the January 1, 2018 is shown below:-

Explanation:

January 1, 2018 Case A Case B Case C

Financial Statements (issued at 100) (at 96) (at 104)

a. Bonds payable $420,000 $420,000 $420,000

b. Unamortized

Premium (discount) 0 $16,800 $16,800

c. Carrying value $420,000 $403,200 $403,200

Working Note

For Case B Unamortized Premium (discount)

= ($420,000 - ($420,000 : 100 * 96)) = $16,800

For Case C Unamortized Premium (discount)

($420,000 - ($420,000 : 100 * 104)) = $16,800