Invested $100,000 in 5-year bonds. The bonds were purchased at par and bear interest at a rate of 8%

| March 29, 2017

There are 4 problems this week. Click on the tabs at the bottom of the spreadsheet to view each problem.
For each of the bonds listed below, record the three requested journal entries.
Dates and descriptions are not required.
Invested $100,000 in 5-year bonds. The bonds were purchased at par and bear interest at a rate of 8% per annum, payable semiannually.
(a)

Prepare the journal entry to record the initial investment.

(b)

Prepare the journal entry that Dorchester would record on each interest date. No journal entries have been made to record monthly interest.

(c)

Prepare the journal entry that Dorchester would record at maturity of the bonds. The journal entry to record the final interest payment was made separately.

Invested $100,000 of face amount of 5-year bonds. The bonds were purchased at 103, and bear interest at a stated rate of 8% per annum, payable semiannually.
(a)

Prepare the journal entry to record the initial investment.

(b)

Prepare the journal entry that Dorchester would record on each interest date. No journal entries have been made to record monthly interest.

(c)

Prepare the journal entry that Dorchester would record at maturity of the bonds. The journal entry to record the final interest payment was made separately.

Invested $100,000 of face amount of 4-year bonds. The bonds were purchased at 98, and bear interest at a stated rate of 8% per annum, payable semiannually.
(a)

Prepare the journal entry to record the initial investment.

(b)

Prepare the journal entry that Dorchester would record on each interest date. No journal entries have been made to record monthly interest.

(c)

Prepare the journal entry that Dorchester would record at maturity of the bonds. The journal entry to record the final interest payment was made separately.

For each of the items below, state if the lease is an operating lease or a capital lease
Reminder: Lessor is the party that owns the item, Lessee is the party using the item
Item 1

The lessee reports the leased asset on its balance sheet

Item 2

Payments are reported fully as rent expense

Item 3

Ownership of the property passes to the lessee by the end of the lease term

Item 4

The lease term is at least 75% of the remaining life of the property

Item 5

Interest expense is measured and reported by the lessee

Item 6

Depreciation of the leased asset is not reported by the lessee

Item 7

At the inception of the lease, the lessee records both an asset and liability

Item 8

The lessee reports a liability for the present value of all future payments anticipated under the lease agreement

Item 9

The lessor continues to report the tangible asset covered by the lease on its balance sheet

Listed below are nine fixed asset transactions. Record the journal
entries. Dates and descriptions are not required. The only account
titles you will need are listed:
Account titles:
Cash
Land
Land Improvements
Building
Equipment
Expense (determine expense account title)
Prepaid account (determine full account title)
Item 1

Paid $2,500 for one year insurance coverage on equipment

Item 2

Paid $7,500 for trees and shrubs

Item 3

Paid $500 attorney’s fees for document preparation related
to land purchase

Item 4

Item 5

Paid $150,000 for land and building.
The land was
separately valued at $40,000, and the building at $120,000.
Hint – the cash is only $150,000 and the entry must
balance.
Paid $1,000 freight costs on purchase of new furniture

Item 6

Paid $300 for staplers, trash cans, and desktop mats

Item 7
Item 8

Ordered new $50,000 truck, to be delivered and paid for in
the future
Paid $10,000 of interest costs on loan on active building
construction project

Item 9

Paid $25,000 to expand parking lot paving

Item 1

Item 2

Item 3

Item 4

Item 5

Item 6

Item 7
Item 8

Item 9

Depreciation
Ace Specialties bought a delivery truck for $40,000 cash. The expected useful life is 5 years and the salvage value is $5,000.
Ace uses a calendar year and the truck was purchased on July 1, 2015.
Calculate the depreciation for each year using the straight line method and the double declining balance method.
Show the journal entry for year one for the double declining balance method.
Straight line method
year

depreciation

remaining book value

2015
2016
2017
2018
2019
2020
2021

Double declining balance method
year

depreciation

remaining book value

account

debit

2015
2016
2017
2018
2019
2020
2021
Journal Entry
date
12/31/2015

credit

Get a 30 % discount on an order above $ 50
Use the following coupon code:
COCONUT
Order your essay today and save 30% with the discount code: COCONUTOrder Now
Positive SSL