ACC 318 Project One Appendix
The following events occurred during the first half of the year. Book the entries necessary for the corresponding transactions that have occurred.
January 22: Issued $75,000 of 6% term bonds due on January 1, 2025 (10 periods) with interest payable each June 30 and December 31. Investors require an effective interest rate of 8%. Record the entries for issuance of the bond.
February 28: A new long-term lease is entered into for extra storage space for the new product line of ink cartridges. The net present value of the future lease payments is $120,400. The lease is for two years at $5,000 per month beginning March 1.
March 6: A long-term note for $60,000 was taken out from the bank. The loan is for two years with an interest rate of 6% repayable at maturity.
April 22: New equipment was purchased to make printers for $55,000. Use straight line depreciation assuming a 4-year life, with no residual value. Use full year’s depreciation for the first year.
April 17: 200 shares of common stock with a $1 par value were sold for $20 per share.
May 5: Paid cash dividends to stockholders of $22,500.
June 22: Purchased 50 shares of the company’s stock at $25 per share.
June 30: Book the depreciation for the first half of the year on the printer equipment purchased April 22.
June 30: Book the interest for the first half of the year on the loan you took out on March 6.
June 30: Book the interest payment and amortization on discount for bond.
June 30: Paid the rent expense for the first half of the year in cash.
June 30: Book the service revenue of $100,000 for the first half of the year paid in cash.
This is what I came up with, is it possible you could verify my answers whether correct or not? The questions I need help with are #9 and 10 the June 30th questions pertaining to the interest expense. See Below: ...................................................................................................................................................................Cash $68,916.83
Discount on Bonds Payable $6,083.17
Bond Payable $75,000.00
Right of Use Asset $120,400.00
Lease Liability $120,400.00
Cash $60,000.00
Notes Payable $60,000.00
Printer Equipment $55,000.00
Cash $55,000.00
Cash $4,000.00
Common Stock $200.00
Additional Paid in Capital $3,800.00
Retained Earnings $22,500.00
Cash $22,500.00
Treasury $1,250.00
Cash $1,250.00
Depreciation Expense $6,875.00
Accumulated Depreciation $6,875.00
Interest Expense ?
Interest Payable ?
Interest Expense ?
Discount on Bonds Payable ?
Cash ?
Rent Expense $20,000.00
Cash $20,000.00
Cash $100,000.00
Service Revenue $100,000.00 ..................................................................................................................................................................
$469,075.00 $469,075.00
