Interest expense on bonds
[DOC File]Accounting for Bonds
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Interest expense is calculated using the effective rate (times the BV of Bonds) and interest payable is calculated using the stated rate (times BP). Any difference between the two is a plug to either Discount or Premium on Bonds.
[DOC File]Practice Problem 2
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The expansion will cost $300,000, which can be financed either by bonds at an interest rate of 14 percent or by selling 10,000 shares of common stock at $30 per share. The current income statement before expansion is as follows: DESOTO TOOLS, INC. Income Statement 200X Sales $1,500,000 Less: Variable costs $450,000 Fixed costs 550,000 1,000,000 ...
[DOC File]Chapter 5
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a. interest expense is deductible for tax purposes. b. principal payments on debt are deductible for tax purposes. ... B. pretax rate of interest for bonds and stated annual dividend rate less the expected earnings per share for preferred stock .
[DOC File]P14-5 (Comprehensive Bond Problem) In each of …
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C) The numerator of the ratio consists of net income plus interest expense times the tax rate. D) The numerator of the ratio consists of net income plus interest expense times one minus the tax rate. Level: Easy LO: 2 Ans: D. 19. Which of the following is not a source of financial leverage? A) Bonds payable. B) Accounts payable.
[DOC File]CHAPTER 15
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Income Before Income Taxes + Interest Expense Interest Expense The higher the interest coverage ratio, the lower the company’s risk will be of defaulting on interest payments. 6. The most common types of long-term debt are bonds payable, notes payable, mortgages payable, long-term leases, pension liabilities, other postretirement benefits ...
[DOC File]CHAPTER 1
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10,000 2 Jul. 1 Interest Expense. Premium on Bonds Payable. Cash 9,625. 375 10,000 3 Dec. 31 Interest Expense. Premium on Bonds Payable. Interest Payable 9,625. 375 10,000 Homework Problem 4. Glaser Corporation. filename: M6T1G4.html. Glaser Corporation issued $500,000 of 10-year, 8% bonds at 98 on January 1, 2000. Interest is payable on ...
[DOC File]CHAPTER 10
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Calculating Interest Payments and Interest Expense. Interest Payments . on bonds are calculated by multiplying the par value of the bond by the . contract interest rate. If interest is paid semiannually (twice a year), the number of periods is doubled and the interest rate is cut in half. Bond interest expense
[DOC File]THEORY - CPA Diary
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Sep 03, 2010 · Danny Ferry Co. sells $250,000 of 10% bonds on March 1, 2007. The bonds pay interest on September. 1 and March 1. The due date of the bonds is September 1, 2010. The bonds yield 12%. Give. entries through December 31, 2008. 2. Brad Dougherty Co. sells $600,000 of 12% bonds on June 1, 2007. The bonds pay interest on. December 1 and June 1.
3 Ways to Calculate Annual Interest on Bonds - wikiHow
Dec. 31 Bond Interest Expense 10,400. Discount on Bonds Payable 400. Bond Interest Payable 10,000 (To record accrued bond interest and amortization of bond discount) Over the term of the bonds, the balance in Discount on Bonds Payable will decrease annually by the same amount until it has a zero balance at the maturity date of the bonds.
[DOC File]BONDS & L-T NOTES
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2002 (a) Jan. 1 Cash 3,400,000 Bonds Payable 3,400,000 Sold bonds at par. (b) June 30 Bond interest expense 153,000 Cash 153,000 Paid semiannual interest on bonds. (c) Dec. 31 Bond interest expense 153,000 Cash 153,000 Paid semiannual interest on bonds.
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