Bond Transactions Brand Company issued $1,450,000 face value, eight-year, 15% bo
ID: 2718915 • Letter: B
Question
Bond Transactions
Brand Company issued $1,450,000 face value, eight-year, 15% bonds on April 1, 2014, when the market rate of interest was 15%. Interest payments are due every October 1 and April 1. Brand uses a calendar year-end.
Required:
1. Identify and analyze the effect of the issuance of the bonds on April 1, 2014.
How does this entry affect the accounting equation?
If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign.
2. Identify and analyze the effect of the payment of interest on October 1, 2014.
How does this entry affect the accounting equation?
If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign.
3. Determine the total cash inflows and outflows that occurred on the bonds over the eight-year life.
Activity - Select your answer -OperatingInvestingFinancingInvesting and FinancingCorrect 1 of Item 1 Accounts - Select your answer -Cash Increase, Bonds Payable IncreaseCash Increase, Bonds Payable DecreaseCash Decrease, Bonds Payable IncreaseCash Decrease, Bonds Payable DecreaseCorrect 2 of Item 1 Statement(s) - Select your answer -Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 1Explanation / Answer
Solution:
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Please post other parts clearly
Activity Financing Activity Accounts Cash increase, Bonds Payable increase Statements Balance Sheet