On January 1, 2014, Hannigan Company issued bonds with a face value of $600,000. Final Exam

On January 1, 2014, Hannigan Company issued bonds with a face value of $600,000.The bonds carry a stated interest of 7% payable each January 1.a. Prepare the journal entry for the issuance assuming the bonds are issued at 97.b. Prepare the journal entry for the issuance assuming the bonds are issued at102.Frye Company issued $700,000, 10%, 10-year bonds on January 1, 2014, at 105.Interest is payable annually. Frye uses the effective-interest method of amortizationand has a calendar year end and the bonds were issued for an effective interest rateof 8%.InstructionsPrepare all journal entries made in 2014 related to the bond issue.Morten Corporation purchased $480,000 of its bonds on June 30, 2014, at 102 andimmediately retired them. The carrying value of the bonds on the retirement datewas $431,100. The bonds pay annual interest and the interest payment due on June30, 2014, has been made and recorded.Prepare the journal entry to record the retirement or conversion of the bonds.McEvoy, Inc., purchased $330,000 of its bonds at 96 on June 30, 2014, andimmediately retired them. The carrying value of the bonds on the retirement datewas $321,000. The bonds pay annual interest and the interest payment due on June30, 2014, has been made and recorded.Prepare the journal entry to record the retirement or conversion of the bonds.Wynne Company issued $900,000 of 10%, 5-year bonds at 108. Interest is paidannually, and the effective interest method is used for amortization. Assume that themarket rate for similar investments is 8%. The bonds are issued on the date of thebonds.a. What amount was received for the bonds?b. How much interest is paid each interest period?c.What is the premium amortization for the first interest period?d. How much interest expense is recorded on the first interest date?e. What is the carrying value of the bonds after the first interest date?Warner Company issued $4,000,000 of 6%, 10-year bonds on one of itsinterest dates for $3,454,800 to yield an effective annual rate of 8%. The effectiveinterest method of amortization is to be used. How much bond interest expense (tothe nearest dollar) should be reported on the income statement for the end of thefirst year?a. $277,110b. $276,384c.$275,655d. $240,000Patrick Corporation is authorized to issue 1,000,000 shares of $1 par value commonstock. During 2014, the company has the following stock transactions.Jan. 15 Issued 700,000 shares of stock at $7 per share.Sept. 5 Purchased 20,000 shares of common stock for the treasury at $8 per share.Dec. 6 Declared a $0.50 per share dividend to stockholders of record onDecember 20, payable January 3, 2015.InstructionsJournalize the transactions for Patrick CorporationOn November 1, 2014, Kalen Corporation’s stockholders’ equity section is as follows:Common stock, $10 par value$600,000Paid-in capital in excess of par value—Common Stock180,000Retained earnings200,000Total stockholders’ equity$980,000On November 1, Kalen declares and distributes a 15% stock dividend when the marketvalue of the stock is $16 per share.InstructionsIndicate the balances in the stockholders’ equity accounts after the stock dividend hasbeen distributed.Racer Corporation’s December 31, 2014 balance sheet showed the following:8% preferred stock, $20 par value, cumulative,40,000 shares authorized; 20,000 shares issued400,000Common stock, $10 par value, 4,000,000 shares authorized;2,600,000 shares issued, 2,560,000 shares outstanding26,000,000Paid-in capital in excess of par value – preferred stock80,000Paid-in capital in excess of par value – common stock36,000,000Retained earnings10,200,000Treasury stock (30,000 shares)840,000Racer declared and paid a $100,000 cash dividend on December 15, 2014. If thecompany’s dividends in arrears prior to that date were $24,000, Racer’s commonstockholders receiveda. $76,000.b. $36,000.c.$44,000.d. no dividend.Outstanding stock of the Hall Corporation included 40,000 shares of $5 parcommon stock and 20,000 shares of 6%, $10 par non-cumulative preferred stock. In2013, Hall declared and paid dividends of $8,000. In 2014, Hall declared and paiddividends of $24,000. How much of the 2014 dividend was distributed to preferredshareholders?a. $16,000.b. $28,000.c.$12,000.d. None of these answer choices are correct.The board of directors of Benson Company declared a cash dividend of $1.50per share on 42,000 shares of common stock on July 15, 2014. The dividend is to bepaid on August 15, 2014, to stockholders of record on July 31, 2014. The effects ofthe journal entry to record the payment of the dividend on August 15, 2014, are toa. decrease stockholders’ equity and decrease liabilities.b. decrease liabilities and decrease assets.c.increase stockholders’ equity and increase liabilities.d. increase stockholders’ equity and decrease assets.The net income reported on the income statement for the current year was$440,000. Depreciation was $62,000. Accounts receivable and inventoriesdecreased by $20,000 and $32,000, respectively. Prepaid expenses and accountspayable increased, respectively, by $2,000 and $16,000. How much cash wasprovided by operating activities?a. $496,000.b. $568,000.c.$536,000.d. $436,000.Brad Ford Company reports a $32,000 increase in inventory and a $8,000 increase inaccounts payable during the year. Cost of goods sold for the year was $190,000.Using the direct method of reporting cash flows from operating activities, cashpayments made to suppliers werea. $190,000.b. $214,000.c.$166,000.d. $166,000.The general ledger of the Summer Company provides the following information:End of YearBeginning of YearAccounts Receivable$ 64,000$ 84,000Inventory240,000205,000Accounts Payable42,00062,000The company’s net sales for the year was $2,000,000 and cost of goods soldamounted to $1,700,000.Compute the following:A) Cash receipts from customersB) Cash payments to suppliersIf a gain of $13,500 is incurred in selling (for cash) office equipment having a bookvalue of $100,000, the total amount reported in the cash flows from investingactivities section of the statement of cash flows isa. $86,500.b. $113,500.c.$100,000.d. $13,500.