On November 1, 2022, Huerter Inc. issued $8 million of 9 year, 8% bonds. The market rate of interest for these bonds is
Posted: Tue Jul 05, 2022 11:48 am
On November 1, 2022, Huerter Inc. issued $8 million of 9 year,8% bonds. The market rate of interest for these bonds is 12%. Interest is payable semiannually on November 1 and May 1. Huerter uses the effective-interest method of amortizing bondpremium. Interest expense for the year ended December 31,2022 is.
On January 1, 2021, Gobert Company sold property to BeasleyCompany. There was no established exchange price for the property,and Beasley gave Gobert a $747,000 zero-interest-bearing notepayable on January 1, 2024. The prevailing rate of interest for anote of this type is 5%. The property had a book value of$438,000 to Gobert.
What should be the balance of the Discount on Notes Payableaccount on the books of Beasley at December 31, 2021 afteradjusting entries are made, assuming that the effective-interestmethod is used?
On January 1, 2021, Gobert Company sold property to BeasleyCompany. There was no established exchange price for the property,and Beasley gave Gobert a $747,000 zero-interest-bearing notepayable on January 1, 2024. The prevailing rate of interest for anote of this type is 5%. The property had a book value of$438,000 to Gobert.
What should be the balance of the Discount on Notes Payableaccount on the books of Beasley at December 31, 2021 afteradjusting entries are made, assuming that the effective-interestmethod is used?