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Journal Entries, Balance Sheets, Interest Expenses

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The Defiance College sells season tickets for four home football games at a price of $15. For the 2011 season, 5,000 season tickets were sold.

(a) Write the journal entry or use the horizontal model to show the effect of the sale of the season tickets.
(b) Write the journal entry or use the horizontal model to show the effect of hosting a home football game.
(c) What category on the balance sheet would the account balance representing funds received for games not yet played be classified (current assets, non-current assest, current liabilities, long-term debt, revenue, expense)? Assume that The Defiance College follows the same accounting and financial reporting procedures that are used in business.

15. Ariel, Inc., issued $30 million face amount of 9% bonds when market interest rates were 9.30% for bonds of similar risk and other characteristics.

(a) How much interest will be paid annually on these bonds?
(b) Will the bonds be issued at a premium or discount? Explain your answer.
(c) Will the annual interest expense on these bonds be more than, equal to, or less than, the amount of interest paid each year? Explain your answer.

16. The balance sheet caption for common stock is:

Common stock, $10 par value, 7,000,000 shares authorized, 5,700,000 shares issued, 5,500,000 shares outstanding.

(a) Calculate the dollar amount that should be reported for Common Stock.
(b) Calculate the total amount of a cash dividend of $1.00 per share.
(c) What accounts for the difference between issued shares and outstanding shares?

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Solution Summary

The journal entry or use for horizontal models to show the effect of the sale of the season tickets are determined.

$2.19
Similar Posting

Mischa Auer Co. bond transactions, journal entries, balance sheet presentation

(Entries and Questions for Bond Transactions) On June 30, 2008, Mischa Auer Company issued $4,000,000 face value of 13%, 20-year bonds at $4,300,920, a yield of 12%. Auer uses the effective interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31.

Instructions
1. Prepare the journal entries to record the following transactions.
1. The issuance of the bonds on June 30, 2008.
2. The payment of interest and the amortization of the premium on December 31, 2008.
3. The payment of interest and the amortization of the premium on June 30, 2009.
4. The payment of interest and the amortization of the premium on December 31, 2009.

2. Show the proper balance sheet presentation for the liability for bonds payable on the December 31, 2009, balance sheet.

3. Provide the answers to the following questions.
1. What amount of interest expense is reported for 2009?
2. Will the bond interest expense reported in 2009 be the same as, greater than, or less than the amount that would be reported if the straight-line method of amortization were used?
3. Determine the total cost of borrowing over the life of the bond.
4. Will the total bond interest expense for the life of the bond be greater than, the same as, or less than the total interest expense if the straight-line method of amortization were used?

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