CP10-4 Comparing Bonds Issued at Par, Discount, and Premium [LO 10-3] Sikes Corp

Question

CP10-4 Comparing Bonds Issued at Par, Discount, and Premium [LO 10-3] Sikes Corporation, whose annual accounting period ends on December 31, issued the following bonds Date of bonds: January 1, 2015 Maturity amount and date: $250,000 due in 10 years (December 31, 2024) Interest: 10 percent per year payable each December 31 Date issued: January 1, 2015 Required 1. For each of the three independent cases that follow, provide the following amounts to be reported on the January 1, 2015, financial statements immediately after the bonds are issued. TIP: See Exhibit 10.5 for an illustration distinguishing Bonds Payable from their carrying value. (Negative amounts should be indicated with a minus sign.) Case A (issued at 100) Case B (at 95) $ 250,000$250,0250,000 Case at 103) January 1, 2015-Financial statements: a. Bonds payable b. Unamortized premium (or discount) C. Carrying value $ 250,000

Explanation / Answer

Schedule :

January 1,2015-Financial statements Case A (issued at 100) Case B (at 95) Case C (at 103) a. Bonds payable 250000 250000 250000 b. Unamortized premium (discount) 0 -12500 7500 c. Carrying value 250000 237500 257500

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