Learning Materials
Features
Discover
Chapter 12: 6TI (page 639)
Payne Corporation has the folowing accounts as of December 31, 2018:
Total Assets $60,000
Total Liabilities 20,000
Total Equity 40,000
Compute the debt to equity ratio at December 31,2018.
The debt-equity ratio of the Payne Corporation is 0.5:1
Over 30 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
What is the carrying amount of a bond?
Retiring bonds payable before maturity
CoastalView Magazineissued $600,000 of 15-year, 5% callable bonds payable on July31, 2018, at 94. On July 31, 2021, CoastalViewcalled the bonds at 101. Assume annualinterest payments.
Requirements
1. Without making journal entries, compute the carrying amount of the bonds payableat July 31, 2021.
2. Assume all amortization has been recorded properly. Journalize the retirement ofthe bonds on July 31, 2021. No explanation is required.
In regard to a bond discount or premium, what is the effective-interest amortization
method?
What type of account is Discount on Bonds Payable? What is its average balance? Is it added to or subtracted from the Bonds Payable charge to determine the carrying amount?
Weaver Corporation includes the following selected accounts in its general ledger on December 31, 2018:
Notes Payable (long-term) \( 75,000 Interest Payable (due next year) \) 720
Bonds Payable (long-term) 195,000 Sales Tax Payable 480
Accounts Payable 20,400 Premium on Bonds Payable 5,850
Salaries Payable 1,680 Estimated Warranty Payable 1,080
Prepare the liabilities section of Weaver Corporation’s balance sheet at December 31, 2018.
What do you think about this solution?
We value your feedback to improve our textbook solutions.
Explanations 
Textbooks 
Exams 
GCSE 
IGCSE 
AS 
A Level 
International A Level 
University Admissions Tests 
Flashcards 
Vaia AI 
Notes 
Study Plans 
Study Sets 
Find a job 
Find a degree 
Student Deals 
Magazine 
Mobile App