Chap 10

E10-1
a. Cash $15,000
Note payable $15,000
b. Interest expenses $100
Interest payable $100
c. Interest expenses $700
Interest payable $700
d. Note payable $15,000
Interest payable $700
Cash $15,700
E10-3
a. Cash $60,000
Note payable $60,000
b. Interest expenses $400
Interest payable $400
c. Note payable $60,000
Interest payable $2,400
Cash $62,400
d. Total financing cost is 400.6=$2,400
P10-2A
Sep 1 Merchandise inventory $1,200
Notes payable $1,200
Sep 30 Interest expense $60
Interest payable $60
Oct 1 Climbing wall $16,500
Notes payable $16,500
Oct 31 Interest expense $170
Interest payable $170
Nov 1 Vehicle $34,000
Cash $8,000
Note payable $26,000
Nov 30 Interest expense $300
Interest payable $300
Dec 1 Note payable $12,000
Interest payable $240
Cash $12,240
Dec 31 Interest expense $240
Interest payable $240
P10-3A
a. Bonds interest payable $40,000
Cash $40,000
b. Bonds payable $200,000
Loss on redemption of bonds $60,000
Cash $260,000
c. Bond interest expense $3,000
 Cash $3,000
P10-4A
a. Cash $700,000
Bond payable $700,000
b. Interest expense $8,750
Interest payable $8,750
c. Kristal Corp
Balance sheet (Partial)
December 31,2016
Current liabilities
Interest payable $8,750
Long term liabilities
Bonds payable $700,000
Total liabilities $708,750
d. Interest payable $35,000
Cash $35,000
e. Interest expense $43,750
Interest payable $43,750
f. Interest payable $43,750
Less on redemption $28,000
Cash $71,750
P10-5A
a. Cash $5,880,000
Discount on issue of bonds $120,000
Bonds payable $6,000,000
b. Malcolm Company
Balance sheet (partial)
December 31, 2017
Long term liabilities
Bonds payable $6,000,000
Less on discount on BP (120000-8000) $1,120,000
Carrying value of BP $5,888,000
c. Bonds payable $6,000,000
Loss on redemption of BP $224,000
Cash $6,120,000
Discount on Bp $104,000