Sikes Corporation whose annual accounting period ends on Dec

Sikes Corporation, whose annual accounting period ends on December 31, issued the following bonds: Date of bonds: January 1, 2015 Maturity amount and date: $220,000 due in 10 years (December 31, 2024) Interest: 10 percent per year payable each December 31 Date issued: January 1, 2015 Required: 1. For each of the three independent cases that follow, provide the following amounts to be reported on the January 1, 2015, financial statements immediately after the bonds are issued. TIP: See Exhibit 10.5 for an illustration distinguishing Bonds Payable from their carrying value. (Negative amounts should be indicated with a minus sign.) Case A Case B (issued at 100)(at 95) Case C at 103) January 1, 2015-Financial statements: a. Bonds payable b. Unamortized premium (or discount) c. Carrying value

Solution

January 1,2015 -Financial statements Case A Case B Case C (issued at (Issued at (Issued at 100) 95) 103) a. Bonds Payable 220,000 220,000 220,000 b. Unamortized premium (or discount) 0 -11000 6600 c. Carrying value 220,000 209000 226600