Explore BrainMass

Explore BrainMass

    This post addresses the Synder Software exercise.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    What did you find to be the most challenging part of this problems? Explain why.

    Snyder Software Inc. successfully developed a new spreadsheet program. However, to produce and market the program, the company needed $2.0 million of additional financing. On January 1, 2007, Snyder borrowed money as follows.
    1. Snyder issued $500,000, 11%, 10-year bonds. The bonds sold at face value and pay interest on January 1.
    2. Snyder issued $1.0 million, 10%, 10-year bonds for $886,996. Interest is payable on January 1. Snyder uses the straight-line method of amortization.

    Instructions
    a. For the 11% bonds, prepare journal entries for the following items.
    a. The issuance of the bonds on January 1, 2007.
    b. Accrue interest expense on December 31, 2007.
    c. The payment of interest on January 1, 2008.
    b. For the 10-year, 10% bonds:
    . Journalize the issuance of the bonds on January 1, 2007.
    a. Prepare the entry for the redemption of the bonds at 101 on January 1, 2010, after paying the interest due on this date. The carrying value of the bonds at the redemption date was $920,897

    © BrainMass Inc. brainmass.com June 4, 2020, 2:38 am ad1c9bdddf
    https://brainmass.com/business/accounting/post-addresses-synder-software-exercise-471449

    Solution Preview

    a. The issuance of the bonds on January 1, 2007.

    01/01

    Cash 500,000
    Bonds payable 500,000

    To record issue of 11% 10-year bonds.

    b. Accrue interest expense on December 31, 2007.

    12/31

    Bond interest expense 55,000 (500,000 x 11%)
    Bond interest payable 55,000

    To record accrued bond interest.

    c. The payment of interest on January 1, 2008.

    01/01

    Bond interest payable 55,000 (calculated as 500,000 x 11%)
    Cash 55,000

    To record payment of accrued interest.

    b. For the 10-year, 10% bonds:
    Journalize the issuance of the bonds on January 1, 2007. ...

    Solution Summary

    The solution provides the full answers for the Synder Software exercise found in the Kieso textbook. All calculations and answers are included.

    $2.19

    ADVERTISEMENT