BE14-8 Tan Coorporation issued HK$600,000,000 of 7% bonds on November 1, 2011, fo

The bonds were dated November 1, 2011, and mature in 10 years, with interest payabl
November 1. The effective-interest rate is 6%. prepare Tan's December 31, 2011, adjus

answer :
interest expance $6,446,360
Bonds Payable $ 553,640
Interest Payable $7,000,000
*$644,636,000 x 6% x 2/12 = $6,446,360
$600,000,000 X 7% X 2/12 = $7,000,000

E14-7 (determine proper amounts in accounts balances) presented below are three ind
situations.
a.McEntire Co. Sold $2,500,000 of 11%, 10 years bonds were dated January 1, 2010, an
July 1 and January 1. Determine the amount of interest expense to be reported on July
December 31, 2010.
b.Cheriel Inc. Issued $600,000 of 9% 10 years bonds on June 30, 2010, for $562,500. Th
yield of 10% on the bonds. Interest pay to record if financial statement are issued on O
On October 1, 2010, Chinook Company sold 12% bonds having a maturity value of $80
plus accrued interest, which provides the bondholders with a 10% yield. The bonds are
2010, and mature January 1, 2015, with interest payable December 31 of each years. P
entries at the date of the bond issuance and for the first interest payment.

answer :