Beckwith Boots invested $100,000 in 5-year

B-09.05 Beckwith Boots invested $100,000 in 5-year bonds issued by Ace Brick Company. Thebonds were purchased at par on January 1, 20X1, and bear interest at a rate of 8% perannum, payable semiannually.(a) Prepare the journal entry to record the initial investment on January, 20X1. (b) Prepare the journal entry that Beckwith would record on each interest date. (c) Prepare the journal entry that Beckwith would record at maturity of the bonds. (d) How much cash flowed “in” and “out” on this investment, and how does thedifference compare to total interest income that was recognized? B-09 B-09.05 B-09.05 Name:Date: B-09.05 Section: B-09 (a)(b)(c)GENERAL JOURNAL DateIssue Interest Maturity (d) Accounts Debit Credit Name:Date: B-09.05 Section: B-09.05 Devol Computing invested in $100,000 face amount of 6-year bonds issued by HortonMicro Chip Company on January 1, 20X1. The bonds were purchased at 103, and bearinterest at a stated rate of 8% per annum, payable semiannually.(a) Prepare the journal entry to record the initial investment on January, 20X1. (b) Prepare the journal entry that Devol would record on each interest date. (c) Prepare the journal entry that Devol would record at maturity of the bonds. (d) How much cash flowed “in” and “out” on this investment, and how does thedifference compare to total interest income that was recognized? B-09.06 B-09.06 B-09.06 (a)(b)(c)GENERAL JOURNAL DateIssue Interest Maturity (d) Accounts Debit Credit B-09.06 Davis Steel Company acquired 30% of the stock of Reginald Metals Company. Davisacquired this investment for purposes of being able to exert significant influence over thestrategic plans and operations of Reginald. Following are events pertaining to thisinvestment:June 1 Purchased 30,000 shares of Reginald for $28 per share. June 30 The fair value of Reginald’s stock was $31 per share, and the companyreported June income of $80,000. July 15 The fair value of Reginald’s stock was $30 per share, and the companydeclared and paid a dividend of $0.50 per share. July 31 The fair value of Reginald’s stock was $29 per share, and the companyreported July income of $60,000. (a) What method should be used to account for this investment? (b) Prepare journal entries to account for the activity pertaining to the investment inReginald Metals. (c) If the investment in Reginald Metals was insufficient to allow Davis to exertsignificant influence, how would the accounting approach differ? B-09.0 B-09.08 (a) B-09.0 (b) GENERAL JOURNAL Date (c) Accounts Debit Credit B-09.08 Erik Food Supply Company issued $100,000 of face amount of 4-year bonds on January1, 20X1. The bonds were issued at 98, and bear interest at a stated rate of 8% perannum, payable semiannually. The discount is amortized by the straight-line method.(a) Prepare the journal entry to record the initial issuance on January, 20X1. (b) Prepare the journal entry that Erik would record on each interest date. (c) Prepare the journal entry that Erik would record at maturity of the bonds. (d) How much cash flowed “in” and “out” on this bond issue, and how does thedifference compare to total interest expense that was recognized? B-13.0 B-13.08 B-13.08 (a)(b)(c)GENERAL JOURNAL DateIssue Interest Maturity (d) Accounts Debit Credit B-13.08 Petersen Stores invested in $100,000 face amount of 4-year bonds issued by Erik FoodSupply Company on January 1, 20X1. The bonds were purchased at 98, and bearinterest at a stated rate of 8% per annum, payable semiannually.(a) Prepare the journal entry to record the initial investment on January, 20X1. (b) Prepare the journal entry that Petersen would record on each interest date. (c) Prepare the journal entry that Petersen would record at maturity of the bonds. (d) How much cash flowed “in” and “out” on this investment, and how does thedifference compare to total interest income that was recognized? B-09.0 B-09.07 (a)(b)(c) B-09.07 GENERAL JOURNALDateIssue Interest Maturity (d) Accounts Debit Credit B-09.07 Ace Brick company issued $100,000 of 5-year bonds. The bonds were issued at par onJanuary 1, 20X1, and bear interest at a rate of 8% per annum, payable semiannually. (a) Prepare the journal entry to record the bond issue on January, 20X1. (b) Prepare the journal entry that Ace would record on each interest date. (c) Prepare the journal entry that Ace would record at maturity of the bonds. (d) How much cash flowed “in” and “out” on this bond issued, and how does thedifference compare to total interest expense that was recognized? B-13.06 B-13.06 B-13.06 (a)(b)(c)GENERAL JOURNAL DateIssue Interest Maturity (d) Accounts Debit Credit B-13.06 Horton Micro Chip Company issued $100,000 of face amount of 6-year bonds on January1, 20X1. The bonds were issed at 103, and bear interest at a stated rate of 8% perannum, payable semiannually. The premium is amortized by the straight-line method.(a) Prepare the journal entry to record the initial issue on January, 20X1. (b) Prepare the journal entry that Horton would record on each interest date. (c) Prepare the journal entry that Horton would record at maturity of the bonds. (d) How much cash flowed “in” and “out” on this bond issue, and how does thedifference compare to total interest expense that was recognized? B-13.07 B-13.07 B-13.07 (a)(b)(c)GENERAL JOURNAL DateIssue Interest Maturity (d) Accounts Debit Credit B-13.07 Clear Water Coffee issued $100,000 of 7% bonds on January 1, 20X1. The bonds wereissued at par and pay interest on June 30 and December 31 of each year. By December31, 20X5, the market rate of interest had increased, and Clear Water was able toreacquire and retire the bonds for $97,500, plus accrued interest. Prepare the journal entry to record the interest payment and bond retirement onDecember 31, 20X5. B-13.12 B-13.12 B-13.12 GENERAL JOURNAL Date31-Dec 31-Dec Accounts Debit Credit B-13.12 Ozark Corporation reported net income of $100,000 for 20X5. The income statementrevealed sales of $1,000,000; gross profit of $520,000; selling and administrative costsof $340,000; interest expense of $20,000; and income taxes of $60,000.The selling and administrative expenses included $25,000 for depreciation.Noequipment was sold during the year. Equipment purchases were made with cash.Prepaid insurance included in the balance sheet related to administrative costs. Allaccounts payable included in the balance sheet relate to inventory purchases. Thechange in retained earnings is attributable to net income and dividends. The increase incommon stock and additional paid-in capital is due to issuing additional shares for cash. Using the indirect approach, prepare a statement of cash flows for Ozark for the yearending December 31, 20X5. Comparative balance sheets for Ozark follow.OZARK CORPORATIONBalance SheetDecember 31, 20X4 and 20X5AssetsCash 20X5$ 458,700 20X4$ 471,450 Accounts receivable 199,250 171,500 Inventories 248,600 278,800 13,000 11,000 250,000 250,000 1,500,000 1,300,000 Prepaid insuranceLandBuilding and equipmentLess: Accumulated depreciationTotal assets (205,000) (180,000) $ 2,464,550 $ 2,302,750 $ 85,700 $ 93,400 LiabilitiesAccounts payableInterest payable 10,500 15,000 Income taxes payable 22,000 8,000 Common stock 710,000 700,000 Paid in capital in excess of par 990,000 900,000 Retained earnings 646,350 586,350 Stockholders’ equity Total liabilities and equity $ 2,464,550 $ 2,302,750 B-16. B-16.14 B-16. OZARK CORPORATIONStatement of Cash Flows (Indirect Approach)For the Year Ending December 31, 20X5Cash flows from operating activities:Net income $ – Add (deduct) noncash effects on operating incomeDepreciation expense $ – Increase in accounts receivable – Decrease in inventory – Increase in prepaid insurance – Decrease in accounts payable – Decrease in interest payble – Increase in income taxes payable – Net cash provided by operating activities $ – Cash flows from investing activities:Purchase of equipment $ – Net cash used by investing activities – Cash flows from financing activities:Proceeds from issuing stockDividends on common $ – Net cash provided by financing activitiesNet decrease in cash $ Cash balance at January 1, 20X5Cash balance at December 31, 20X5 – $ – B-16.14