Exam 15: Recording and Evaluating Capital Resource Process Activities: Financing

Superscope Industries issued $100,000 of bonds on October 1,2010.Given the following partial bond amortization table for the bonds,prepare all necessary journal entries to record the issuance of the bond and the first year of the bond's life assuming Magnum has a December 31 year-end.Show how the bonds would appear on Superscope's 2010 income statement,balance sheet and statement of cash flows for Superscope Industries.

A 100% stock dividend and a 2 for 1 stock split are similar in that:

Convertible bonds:

During 2010,Delenn Company issued common stock for cash.Which part of the statement of cash flows would be affected by the sale of the common stock?

Stockton Enterprises signed a 4-year capital lease for a computer on June 30,2010.The lease calls for $5,000 down,and four annual payments of $14,196 beginning on June 30,2011.Stockton has a June 30 year end and uses a 10% interest rate for all calculations relative to the lease.Prepare the necessary journal entries to record the signing of the lease on June 30,2010 and the first lease payment on June 30,2011.Show how the lease would appear on the June 30,2011 balance sheet of Stockton Enterprises.

The charter of the BRHC Corporation authorizes the issuance of 3,000,000 shares of no-par common stock and 1,000,000 shares of 10%,$100 par cumulative preferred stock.Events affecting the stockholders' equity section during the first year of operations (2010)are listed below. (1.)300,000 shares of common stock were issued for $20 per share. (2.)25,000 shares of preferred stock were sold at $102 per share. (3.)A building with a fair market value of $820,000 was acquired for a cash payment of $300,000 and 26,000 shares of common stock. (4.)30,000 shares of common stock were issued for $690,000 in cash. (5.)Dividends for the preferred stock were declared and common stock dividend was declared for $1 per share. Required: (A.)Record the transaction described above. (B.)Prepare the stockholders' equity section of BRHC assuming that the corporation generated $1,200,000 of income in the first year.

Carolina Corporation just issued 10,000 shares of $2 par value common stock for $7.50 per share.The journal entry to record this transaction will include all of the following except:

A corporation may "force" its convertible-bond holders to convert.How and why would it be able to do this?

How does the declaration and distribution of a stock dividend affect a firm?

When the Retained Earnings account has a debit balance,it is referred to as a:

How does the amount of premium and discount amortized in each period change over the term of bonds? Discount Premium

In the secondary market,when the market rate of interest on bonds increases:

If stock with a $2 par value was issued for $12 per share,

When a company exercises a call feature and buys its outstanding bonds back prior to their maturity date:

The Discount on Notes Payable account is always used when accounting for a:

A stockholder who received a 10% common stock dividend would have an increase in her/his ownership percentage equal to:

Darvin Company purchased equipment with a fair value of $100,000 on a 6 percent,4-year installment note.What would be Darvin's annual payment on the note,assuming that payments are made at year end?

Carolina Corporation just issued 10,000 shares of $2 par value common stock for $7.50 per share.The journal entry to record this transaction will include a:

J&C Corporation purchased for the treasury 1,000 shares of its own $1 par value common stock at $20 per share.This was the first time the company had ever purchased treasury stock.Shortly thereafter,J&C sold 400 shares of this treasury stock at $17 per share.The journal entry to record the sale of the treasury stock would include a: