S14-10 Retiring bonds payable before maturity Learning Objectives 3,4 On January 1, 2016, Patel issued $400,000 of 7%, five-year bonds payable at 109. Patel has extra cash and wishes to retire the bonds payable on January 1, 2017, immediately after making the second semiannual interest payment. To retire the bonds, Patel pays the market price of 95. Requirements: What is Patel's carrying amount of the bonds payable on the retirement date? How much cash must Patel pay to retire the bonds payable? Compute Patel's gain or loss on the retirement of the bonds payable.
S14-11 Preparing the liabilities section of the balance sheet Learning Objective 5 Master Suites Hotels includes the following selected accounts in its general ledger at December 31, 2016: Notes Payable (long-term) $41,000, Accounts Payable $450,000, Bonds Payable (due 2022) $13,500, Accrued Salaries Payable $1,700, Salaries Payable $3,100. Prepare the liabilities section of Master Suites's balance sheet at December 31, 2016.
S14-12 Computing the debt to equity ratio Learning Objective 6 Richards Corporation has the following amounts as of December 31, 2016: Total assets $81,500, Total liabilities $17,500. Compute the debt to equity ratio at December 31, 2016.
S14A-14 Determining the present value of bond at issuance (Learning Objective 7) Appendix 14A On December 31, 2016, when the market interest rate is 14%, McCann Realty issues $400,000 of 11.25%, 10-year bonds payable. The bonds pay interest semiannually. Determine the present value of the bonds at issuance.
