PRINCIPLES OF FINANCIAL ACCOUNTING II

PARALLEL :
GROUP : (Please write down the name of participants)

CHAPTER 10 – GROUP EXERCISES

1. The following are selected transactions of Blackwood Company in 2015. Blackwood prepares
financial statements annually.

Jan 1. Received $23,400 cash from Hanny Co. for a payment of 18-month rent on unused
office building.
Oct 1. Borrowed $40,000 from Smallvile, issuing a 9-month, 8% note.
Dec 10. Sold merchandise for cash totaling $17,640, which includes 5% sales taxes.
Dec 31. Adjusting entries to record the rent revenue earned for the year.
Dec 31. Adjusting entries to record the interest accrued on Smallvile Bank note.

Instructions: Prepare journal entries for the transactions above.

2. On December 31, 2011. Manchester Co. issued $500,000 of 9%, 5-year callable bonds at an
effective market rate of 11%. Interest is payable annually on December 31. At the end of the
third period (December 31, 2014), Manchester Co. redeemed the bonds at 99.

Instructions: (Untuk semua perhitungan bulatkan ke dollar terdekat/ no decimal)

a. Compute the present value or issuance price of the bonds.
b. Calculate bond discount or bond premium (selisih lebih atau kurang).
c. Using effective-interest method, calculate discount amortization or premium amortization.
d. Prepare journal entries to record the issuance of bonds on December 31, 2011.
e. Prepare journal entries to record the first payment of interest and amortization on December
31, 2012.
f. Calculate the carrying value of bonds on redemption date (3 rd period).
g. Prepare journal entries to record the redemption of bonds.

3. On January 1, 2010, Electra Corporation issued $1,200,000 of 8%, 10-year callable bonds at an
effective market rate of 6%. Interest is payable semiannually on July 1 and January 1. At the end of
the fourteenth period (January 1, 2017), Electra redeemed the bonds at 103.

Instructions: (Untuk semua perhitungan bulatkan ke dollar terdekat/ no decimal)

a. Compute the present value or selling price of the bonds.
b. Calculate bond discount or bond premium (selisih lebih atau kurang).
c. Using straight-line method, prepare amortization schedule.
d. Prepare journal entries for the issuance of bonds on January 1, 2010.
e. Prepare journal entries for the first payment of interest and amortization on July 1 and the
accrued interest on December 31, 2010.
f. Prepare journal entries to record the redemption of bonds.

Semester 2, 2019-2020
 4. PT. Delima purchase a motorcycle Rp21,130,000 on a 12%, 3-year mortgage on July 15, 2019. The
company has paid Rp5,000,000 cash in advance. The terms of the mortgage provide for monthly
annual instalment payment and are due every 15 th of the months.

Instructions: Calculate the first two installment payments and prepare journal entries to record
the mortgage loan and the installment payment in the first period.

Period PMT Interest Expense Reduction of Principal Principal Balance

0
1
2

Semester 2, 2019-2020