ࡱ> oqn{ 'bjbjzz 0r'          ;0xxxxx///////$)24J/ /  xx/"""" x x/"/""r~,T~-xp$9| ,/ 00;0,%6%6~-%6 ~-("//;0%6 : Name:_______________________________ Class Period: __________ 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. 1) Bee Gee Movie, Inc. will issue a $1 million bond offering on January 1, 2016 to finance an upcoming motion picture thriller entitled Chasing the Accounting Dream. The bond term will be four years. In July of 2015, due diligence was performed (audits, underwriting process, etc.) and the stated (contract) rate assigned to the bonds was 10% with annual payments to bond holders each December 31st. Based upon current market conditions, however, the marketplace will now only require an effective (market) interest rate (yield) of 8%. a) Using whole dollars, determine the selling price of these bonds, using present value techniques in the appendices. Indicate whether a Premium or a Discount results. Show all written computations below. Selling price of bonds (with computations and time-line completed below): $_______________   PREMIUM SCENARIO (#1) After we have priced the bond to reflect market conditions, we will account for the four-years of activity using the Effective Interest Method: b) Complete the Amortization Schedule below using the Effective Interest Method (See Pg 553-557) ABCD PeriodCarry value (Present value) at beginning of periodCash Interest Payment (at contract rate of __%)Interest Expense (at market rate of __%)Current Period Amortization (A vs. B)Unamortized (unallocated) Premium or DiscountCarry value (Present value) at end of periodAt Issue:********************************************66,243***********2016 1,066,243$100,000$85, 299($14,701)$51,542$1,051,5422017 $1,051,542$100,000$84,123($15, 877)$35,665$1,035,6652018 $1,035,665$100,000$82,853($17,147)$18,518$1,018,5182019 $1,018,518$100,000$81,481($18,518) 0 $1,000,000* Totals **********  ***********Prior to payoff xxxxxxxxxxx c) Prepare all necessary Journal Entries for Bee Gee Movie for the year 2016. 1/1/16 Cash $1,066,243 Premium on Bonds Payable $66,243 Bonds Payable $1,000,000 12/31/16 Interest Expense $85,299 Premium on B/Payable $14,701 Cash $100,000 2) Bee Gee Movie, Inc. will issue a $1 million bond offering on January 1, 2016 to finance an upcoming motion picture thriller entitled Chasing the Accounting Dream. The bond term will be four years. In July of 2015, due diligence was performed (audits, underwriting process, etc.) and the stated (contract) rate assigned to the bonds was 8% with annual payments to bond holders each December 31st. Based upon current market conditions, however, the marketplace will now require an effective (market) interest rate (yield) of 10%. a) Using whole dollars, determine the selling price of these bonds, using present value techniques in the appendix. Indicate whether a Premium or a Discount results. Show all written computations below. Selling price of bonds (with computations and time-line completed below): $_______________   DISCOUNT SCENARIO (#2) After we have priced the bond to reflect market conditions, we will account for the four-years of activity using the Effective Interest Method: b) Complete the Amortization Schedule below using the Effective Interest Method (See Pg 553-557) ABCD PeriodCarry value (Present value) at beginning of periodCash Interest Payment (at contract rate of __%)Interest Expense (at market rate of __%)Current Period Amortization (A vs. B)Unamortized (unallocated) Premium or DiscountCarry value (Present value) at end of periodAt Issue:********************************************63,398***********2016 936,6022017 2018 2019  $1,000,000* Totals **********  ***********Prior to payoff xxxxxxxxxxx c) Prepare all necessary Journal Entries for Bee Gee Movie for the year 2016 (only). ------------------------------------------------------------------------------------------------------------------------------- 3) Bee Gee Movie, Inc. will issue a $1 million bond offering on January 1, 2016 to finance an upcoming motion picture thriller entitled Chasing the Accounting Dream. The bond term will be four years. In July of 2015, due diligence was performed (audits, underwriting process, etc.) and the stated (contract) rate assigned to the bonds was 8% with annual payments to bond holders each December 31st. Market conditions have not changed since July and the marketplace will accept an effective (market) interest rate (yield) of 8%. Selling price of bonds: $_______________ Compute the selling price of the bonds below and explain why no amortization schedule is required. Be sure to draw timelines for Scenario #3, price the bond using present value techniques as we did in Scenario #1 and provide discussion. This will help you to confirm what we are doing.  $>?MNVW`bchoyz~sgs\TH<hV.hL]>*CJaJhV.hm$>*CJaJhm$CJaJhKh.GCJaJh/d5>*CJ\aJhl`5>*CJ\aJh{95>*CJ\aJh !hiY5>*CJ\aJh5>*CJ\aJh !hyu5>*CJ\aJhskhi+5CJ\hACJ OJQJaJ hE+PCJ OJQJaJ h5A)CJ OJQJaJ hi+CJ OJQJaJ hi+hi+CJ OJQJaJ ?zA ` a 2 3 @ A $Ifgd#8]8gdF18]8gdk3Dh]^`hgd.G8]8gd.G *]*^gdL 8h]8^h]gd;Z ]^gd(I$a$gd !`gdE+P   % ( ) , . / 1 8 9 : = > A B E L M X Y ] ^ d ҿ𿯿ǟ}yyuqymm}yh+hN|hhh[Bh;Z hh.Gh6 hhhh5hKhKCJaJmH nH uh_CJaJhi+CJaJh/dCJaJhKhCJaJhN|CJaJhKhCJaJhKh.GCJaJhm$CJaJhL]CJaJ)           , : ; B K P X ` a d z üڸڼڼڼڸ⤙hWCJmH nH uhLCJmH nH uh.GCJmH nH uhskh.GCJaJmH nH uh4h+ hhx hxhxh[BhN|hUh1hxh_ hh.Gh;Zhh9=hzaJ hzaJ2  2 3 K ] j k u z 庪xxm]H(hk3Dhk3D56>*CJ4aJ4mH nH uhk3D56CJ4aJ4mH nH uhWCJmH nH ujh6LCJUh'PCJmH nH uh5CJmH nH uhskh5CJmH nH uh1h5CJmH nH uhskh.G5CJmH nH uhskh.GCJaJmH nH uhi+CJmH nH uh.GCJmH nH uh1h.G>*CJmH nH u @ A J v { οδwi[MiBhCJmH nH uhU56CJmH nH uh_56CJmH nH uhm:56CJmH nH u!h-h-56CJmH nH uh-CJmH nH uhJ/FCJmH nH uh_CJmH nH uhLCJmH nH uh.GCJmH nH uhk3D5CJ$aJ$mH nH u"hk3Dhk3D5CJ$aJ$mH nH uhk3DCJmH nH u(hk3Dh[v56>*CJ4aJ4mH nH u Ikd$$Ifi֞F :& !`'*TFT4 iayt. $$Ifa$ "#$DKLjklnq ÷÷îåÜؓÓÓÓÀ% *hhk3D5CJ$aJ$mH nH uhmH nH uhmH nH uh-mH nH uh_mH nH uhrh_mH nH uhrhmH nH uhzA)mH nH uhCJmH nH uh_5CJ\mH nH uh.G5CJ\mH nH u+  $-5Mis $Ifgd $Ifgd_$If $$Ifa$ RIC::: $Ifgd$If $$Ifa$kd$$Ifi֞F :& !`'*TFT4 iayt. "#-C:: $$Ifa$kdn$$Ifi֞F :& !`'*TFT4 iayt.$If $Ifgd !#,-56>?HIPQ[\]`acmnvw~øΥoooooø΁ooooooø΁oo"h.h5CJaJmH nH u"h.h?Y5CJaJmH nH u"hk3Dh5CJ aJ mH nH u% *hhk3D5CJ aJ mH nH uhN|CJmH nH uhCJmH nH uhCJmH nH uhrhmH nH uhmH nH u"hk3Dh5CJ$aJ$mH nH u+-6?IQ\]Fkd%$$Ifi֞F :& !`'*TFT4 iayt. $$Ifa$gd?Y]bcnw $$Ifa$gd?Y $$Ifa$ $$Ifa$gd7RF=11 $$Ifa$gd?Y $$Ifa$ $$Ifa$gd7kd$$Ifi֞F :& !`'*TFT4 iayt.  @PQ^_kƻoZGC?hF1h!jp%hDk5h?Y56CJaJmH nH u( *h_Oh?Y56CJaJmH nH uhmh?Y5CJmH nH u% *hmh?Y5CJaJmH nH u *h?YCJaJmH nH uh.5CJaJmH nH uh?YCJmH nH uhN|CJmH nH uhCJmH nH uhCJmH nH u"h.h5CJaJmH nH u"h.h?Y5CJaJmH nH uF: $$Ifa$gd7kd$$Ifi֞F :& !`'*TFT4 iayt. $$Ifa$gd?Y $If$If^`gd. $$Ifa$gd?Y $$Ifa$$%012RIICCCC$If $$Ifa$kdJ$$Ifi֞F :& !`'*TFT4 iayt.2345@Q]^_LGgdrkd$$Ifi֞F :& !`'*TFT4 iayt.$Ifk#%&;=GHV\]_jktzǼǼǦǘǼǦǘǼǦǘǼǦǼǦǦǼǦ~hh5CJaJ *hmh!jp5CJaJ *hmh!jp5CJaJ *hQ5CJaJ *hN|5CJaJ *hm5CJaJ *hmh5CJaJhN|5>*CJaJh5>*CJaJhxh6hF1hF1hF1>*0_Egop8]8gd1`gdF1h]^`hgdr8]8gdr *]*^gdL 8h]8^hgdr h]^hgd1gdr*]*gdF1#,VZ`ab _bEop坍rbh!jphrCJaJmH nH uh1hL>*CJmH nH uhLCJmH nH uh3h9=CJaJmH nH uhrCJaJhUCJaJh1CJaJhuJCJaJh+CJaJhm:CJaJhN|CJaJhCJaJh6CJaJh9=h9=CJaJh9=CJaJh!jph%p}u`u`UG*CJ4aJ4mH nH u"hk3D56>*CJ4aJ4mH nH uhk3D56CJ4aJ4mH nH uh'PCJmH nH uh1CJmH nH ujh1CJUh3hF1CJaJmH nH uh5CJmH nH uh1hr5CJmH nH uh!jphr5CJmH nH uhrCJmH nH u}~ $$Ifa$gd;V $Ifgd;V8]8gd#`gdF18]8gdk3D8]8gd2} }~ X_ !"./89EFLʼ闋yyyyf% *hh5CJ aJ mH nH uhmH nH uh#mH nH uhrh#mH nH uhzA)mH nH uh#5CJ\mH nH uhU56CJmH nH uh#56CJmH nH uhm:56CJmH nH u!h-h#56CJmH nH uh#CJmH nH uhF1CJmH nH u&1?RFF=== $Ifgd;V $$Ifa$gd;Vkd$$Ifi֞ :& !&F4 iayt;V?Gajr  $Ifgd;V  "/9FRF==== $Ifgd;V $$Ifa$gd;Vkdo$$Ifi֞ :& !&F4 iayt;VFMYZ_`hI== $$Ifa$gd;Vkd&$$Ifi֞ :& !&F4 iayt;V $Ifgd;VLMXYZ]^`ghnqr{~øΥøøø΃qffQ( *h_Oh#56CJaJmH nH uhCJmH nH u" *h_eh9=CJaJmH nH u *h9=CJaJmH nH u% *hh#5CJ$aJ$mH nH u% *hh5CJ$aJ$mH nH uhN|CJmH nH uhCJmH nH uh#CJmH nH uhrh#mH nH uhmH nH u"hh#5CJ aJ mH nH uhijklmnIkd$$Ifi֞ :& !&F4 iayt;V $Ifgd;Vnstuvwxyz $Ifgd;V $$Ifa$gd;Vz{RFF=== $Ifgd;V $$Ifa$gd;Vkd$$Ifi֞ :& !&F4 iayt;VI== $$Ifa$gd;VkdK $$Ifi֞ :& !&F4 iayt;V $Ifgd;VIkd $$Ifi֞ :& !&F4 iayt;V $Ifgd;V $Ifgd;V $$Ifa$gd;V   -018:<=><EOҽҨ|qfq[SqHqhm:h+CJaJhN|CJaJhm:hCJaJhm:h6CJaJhm:hO;CJaJhm:hGCJaJhpCJmH nH uhF1CJmH nH uh2}CJmH nH uh!jpCJmH nH u hm:>* hN|>* h>*h9=h6hF1h#>*h#h3h#CJaJh#CJmH nH u%hDk5h#56CJaJmH nH u:;<=RMD;;; gd*]*gd#gd#kd $$Ifi֞ :& !&F4 iayt;V=>jk' h]^hhh]^h`hgdq hh]^h`hgd;Z vh]v^hgd1 gdOkEIZ[k 378BCFS\ꫝsbQsChm:h 9CJmH nH u!hm:h.G5>*CJmH nH u!hm:h&z5>*CJmH nH uhm:hqCJmH nH uhm:h\CJmH nH uhm:hUZCJmH nH uhm:h.GCJmH nH uhm:h.GCJaJhm:h1CJaJhm:h+CJaJhN|CJaJhm:hUCJaJhm:huJCJaJhm:hO;CJaJhm:hzCJaJ\ghjk%&'ȸo"h2}h.G5CJ$aJ$mH nH uhB5CJ$aJ$mH nH u% *h2}h2}5CJ$aJ$mH nH u( *hBhB5>*CJ$aJ$mH nH u *hB5CJ$aJ$mH nH uh2}h2}CJaJmH nH uh.GCJmH nH uhm:h.GCJmH nH uhm:hUZCJmH nH u .:pq/ =!"#$% $$If!vh#v*#vT#v#v#v#vF#vT:V i5*5T5555F5T/ 44 iayt.$$If!vh#v*#vT#v#v#v#vF#vT:V i5*5T5555F5T/ 44 iayt.$$If!vh#v*#vT#v#v#v#vF#vT:V i5*5T5555F5T/ 44 iayt.$$If!vh#v*#vT#v#v#v#vF#vT:V i5*5T5555F5T/ 44 iayt.$$If!vh#v*#vT#v#v#v#vF#vT:V i5*5T5555F5T/ 44 iayt.$$If!vh#v*#vT#v#v#v#vF#vT:V i5*5T5555F5T/ 44 iayt.$$If!vh#v*#vT#v#v#v#vF#vT:V i5*5T5555F5T/ 44 iayt.$$If!vh#v*#vT#v#v#v#vF#vT:V i5*5T5555F5T/ 44 iayt.$$If!vh#v#v#v#v#v#vF#v:V i555555F5/ 44 iayt;V$$If!vh#v#v#v#v#v#vF#v:V i555555F5/ 44 iayt;V$$If!vh#v#v#v#v#v#vF#v:V i555555F5/ 44 iayt;V$$If!vh#v#v#v#v#v#vF#v:V i555555F5/ 44 iayt;V$$If!vh#v#v#v#v#v#vF#v:V i555555F5/ 44 iayt;V$$If!vh#v#v#v#v#v#vF#v:V i555555F5/ 44 iayt;V$$If!vh#v#v#v#v#v#vF#v:V i555555F5/ 44 iayt;V$$If!vh#v#v#v#v#v#vF#v:V i555555F5/ 44 iayt;V^ 2 0@P`p2( 0@P`p 0@P`p 0@P`p 0@P`p 0@P`p 0@P`p8XV~_HmH nH sH tH P`PNormal5$7$8$9DH$_HmHnHsH tH uZ`Z Heading 15$7$8$9D@&H$_HmHnHsH tH uZ`Z Heading 25$7$8$9D@&H$_HmHnHsH tH uZ`Z Heading 35$7$8$9D@&H$_HmHnHsH tH uZ`Z Heading 45$7$8$9D@&H$_HmHnHsH tH uZ`Z Heading 55$7$8$9D@&H$_HmHnHsH tH uZ`Z Heading 65$7$8$9D@&H$_HmHnHsH tH uZ`Z Heading 75$7$8$9D@&H$_HmHnHsH tH uZ`Z Heading 85$7$8$9D@&H$_HmHnHsH tH uZ `Z Heading 9 5$7$8$9D@&H$_HmHnHsH tH uDA D Default Paragraph FontVi@V  Table Normal :V 44 la (k (No List HT@H Block Text8]8^CJubobi+Textbook5$7$8$9DH$&5CJOJQJ_HmHnHsH tH uH@H? Balloon TextCJOJQJ^JaJPK![Content_Types].xmlN0EH-J@%ǎǢ|ș$زULTB l,3;rØJB+$G]7O٭V$ !)O^rC$y@/yH*񄴽)޵߻UDb`}"qۋJחX^)I`nEp)liV[]1M<OP6r=zgbIguSebORD۫qu gZo~ٺlAplxpT0+[}`jzAV2Fi@qv֬5\|ʜ̭NleXdsjcs7f W+Ն7`g ȘJj|h(KD- dXiJ؇(x$( :;˹! I_TS 1?E??ZBΪmU/?~xY'y5g&΋/ɋ>GMGeD3Vq%'#q$8K)fw9:ĵ x}rxwr:\TZaG*y8IjbRc|XŻǿI u3KGnD1NIBs RuK>V.EL+M2#'fi ~V vl{u8zH *:(W☕ ~JTe\O*tHGHY}KNP*ݾ˦TѼ9/#A7qZ$*c?qUnwN%Oi4 =3N)cbJ uV4(Tn 7_?m-ٛ{UBwznʜ"Z xJZp; {/<P;,)''KQk5qpN8KGbe Sd̛\17 pa>SR! 3K4'+rzQ TTIIvt]Kc⫲K#v5+|D~O@%\w_nN[L9KqgVhn R!y+Un;*&/HrT >>\ t=.Tġ S; Z~!P9giCڧ!# B,;X=ۻ,I2UWV9$lk=Aj;{AP79|s*Y;̠[MCۿhf]o{oY=1kyVV5E8Vk+֜\80X4D)!!?*|fv u"xA@T_q64)kڬuV7 t '%;i9s9x,ڎ-45xd8?ǘd/Y|t &LILJ`& -Gt/PK! ѐ'theme/theme/_rels/themeManager.xml.relsM 0wooӺ&݈Э5 6?$Q ,.aic21h:qm@RN;d`o7gK(M&$R(.1r'JЊT8V"AȻHu}|$b{P8g/]QAsم(#L[PK-![Content_Types].xmlPK-!֧6 0_rels/.relsPK-!kytheme/theme/themeManager.xmlPK-!0C)theme/theme/theme1.xmlPK-! ѐ' theme/theme/_rels/themeManager.xml.relsPK] 'r kp}LO\'#%&(-478  -]2_? Fhnz=' !"$')*+,./0123568@:(  D   "?J  # "?J  # "?D   "?J  # "?J  # "?B S  ?o ' & jt&jtg gt & jt&jtg gt )) $>  !]a  # & ; = G H V \ ] _ j k q   # , a b    Z^``ggnr{-8;<Okj&) $>  !]a  # & ; = G H V \ ] _ j k q   # , a b    Z^``ggnr{-8;<OkFj&)V0?@ACDEFGHIJKLMNOPQRSTUVWXYZ[\]_`abcdeghijklmpRoot Entry Fp79|rData :1TableBA6WordDocument0rSummaryInformation(^DocumentSummaryInformation8fCompObjr  F Microsoft Word 97-2003 Document MSWordDocWord.Document.89q