Acc291 Week 3 Individual Assignment

Complete Exercise E10-6, E10-8, & E10-18.

Complete Problem 10-3A & 10-6A.

EXERCISE 10-6

Payroll Tax Expense...................................... 352.16

FICA Taxes Payable ..................................................... 198.40

Federal Unemployment Taxes Payable ..... ............ 19.84

State Unemployment Taxes Payable................. ..... 133.92

EXERCISE 10-8

1. True.

2. True.

3. False. When seeking long-term financing, an advantage of issuing bonds

over issuing common stock is that tax savings result.

4. True.

5. False. Unsecured bonds are also known as debenture bonds.

6. False. Bonds that mature in installments are called serial bonds.

7. True.

8. True.

9. True.

10. True.

*EXERCISE 10-18

(a) Jan. 1 Cash ................................................562,613

Discount on Bonds Payable............ 37,387

Bonds Payable.................................... 600,000

(b) July 1 Bond Interest Expense

($562,613 X 5%)............................. 28,131

Discount on Bonds Payable............. 1,131

Cash ($600,000 X 9% X 1/2)............. 27,000

(c) Dec. 31 Bond Interest Expense

[($562,613 + $1,131) X 5%]............. 28,187

Discount on Bonds Payable............... 1,187

Bond Interest Payable ...................... 27,000

PROBLEM 10-3A

(a) 2011

May 1 Cash.............................................................. 600,000

Bonds Payable ................................. 600,000

(b) Dec. 31 Bond Interest Expense ........................... 9,000

Bond Interest Payable

($600,000 X 9% X 2/12)............... 9,000

(c) Current Liabilities

Bond Interest Payable ........................................ $ 9,000

Long-term Liabilities

Bonds Payable, due 2016.................................. $600,000

(d) 2012

May 1 Bond Interest Payable............................. 9,000

Bond Interest Expense

$600,000 X 9% X 4/12) ....................... 18,000

Cash.....................................................