The following are selected account balances for
ABC Co at December :
Statement of Financial Position:
NonCurrent Liabilities
Bonds payable $
Notes Payable $
Current liabilities
Interest Payable $
Cash Flow Statement:
Cash Flow from Financing Activities
Note Payable Installment $
Income Statement:
Interest Expense $
Further Information:
The Bonds payable were issued on January
They are year bonds that bear a stated rate of with interest paid annually on January The periodic amortization for was $
ABC Co uses the effectiveinterest method of amortization.
The notes payable are year, zerointerest bearing notes that are issued on
January and payable in equal installments of $ on December
Required:
For ABC Co:
Calculate the issue price of the notes payable.
Calculate the face value of the bond
Assume that ABC Co extinguished of bonds on January by giving up equipment with a fair value of $ The equipment had an original cost of $ and an accumulated depreciation of $ as of January
Prepare the journal entry on January
