Effective interest method amortization

    • [DOC File]1._Some of the factors to be considered in determining ...

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      , determine the bond selling price and prepare an amortization schedule using the “Effective Interest Amortization Method” as shown in Chp 10 & Appendix “F”. 1) Bee Gee Movie, Inc. plans to issue a $1 million bond offering on January 1, 2015 to finance an upcoming motion picture thriller entitled “Chasing the Accounting Dream”.

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    • [DOC File]Old Exam Packet – Acct 284

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      2010-06-12 · The company uses the effective interest method. 1. Prepare a bond interest expense and premium amortization schedule. 2. Assume the company retired the bonds on September 30, 2011 for $630,000, which includes accrued interest. Prepare the journal entry to record the bonds retirement.

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    • Bond Amortization Schedule - Effective Interest Method

      Amortization under effective interest method (for bond issue costs, premiums, and discounts). Dollars . Amortization under straight-line method. Time . Straight-Line Method • Constant amount of amortization per period . Effective Interest Method • Less amortization in the initial years • More amortization in the latter years . Dollar amount of amortization always increases over the life ...

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    • [DOC File]CHAPTER 1

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      Because the effective-interest method adjusts the stated interest rate to the effective rate, it is theoretically more accurate than the straight-line method. It was therefore designated by the APB as the preferred method of amortization. The straight-line method may be used if the interim results of using it do not differ materially from the resulting amortization using the effective-interest ...

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    • [DOC File]BEE GEE MOVIE - INITIAL ASSIGNMENT BOND HANDOUT

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      Using the effective interest method of amortization and rounding to the nearest dollar, the interest expense in the first year ended December 31 would be: A. $700. B. $543. C. $667. D. $759. 15. A company sells 1 million shares of common stock with a par value of $0.02 for $15 a share. To record the transaction, the company would: A. Increase Cash for $20,000 and increase Common Stock for ...

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    • [DOC File]An Effective Method for Teaching and Understanding ...

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      The effective interest method is more difficult to apply than the straight-line method, but it must be used when the results of the two methods differ significantly. To apply the effective interest method to the amortization of a discount, it is first necessary to determine the market interest rate for similar securities on the issue date. This rate (halved for semiannual interest) is ...

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    • [DOC File]P14-3 Premium Amortization Schedule with Retirement Before ...

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      Accounting 2210 Zeigler: Chapter 10 – Accounting for Bonds. For the three independent scenarios below, determine the bond selling price and prepare an amortization schedule using the “Effective Interest Rate Method” as illustrated in Chp 10 & Appendix “F”.

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    • [DOC File]Accounting for Bonds For each of the following situations ...

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      2010-09-03 · P14-5 (Comprehensive Bond Problem) In each of the following independent cases the company closes. its books on December 31. 1. 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 …

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    • [DOC File]At the end of last year, the company's assets totaled ...

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      If Dorley is using the effective interest amortization method, interest expense on December 31, 2009 will be . A) $60,000. B) $64,417. C) $65,361. D) $67,361 16. The unadjusted balance of the allowance for doubtful accounts of Johnstone Supplies, Inc., is a credit balance in the amount of $28,947 on July 31, 2005. Based on the accounts receivable aging report, bad debt expense will be ...

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