Kelompok 5:

1. 2311070003 - Nuke Putri

2. 2311070004 - Anissya
3. 2311070002 - Ayu M Elvin
4. 2311070058 - Rahmawati Nur Fauziyah
5. 2311070001 - Andhi Fredy
6. 2311070062 - Laila Fitri Yani
7. 2311070060 - Indrawan Nur Fikri

BE14.1 (LO 1)
Whiteside Ltd. issues ¥500,000 of 9% bonds, due in 10 years, with
interest payable semiannually. At the time of issue, the market rate
for such bonds is 10%. Compute the issue price of the bonds.
Present value of the principal
¥500,000 X .37689........................................................................... ¥188,445
Present value of the interest payments
¥22,500 X 12.46221......................................................................... 280,400
Issue price............................................................................... ¥468,845

BE14.2 (LO 1) The Colson Company issued €300,000 of 10% bonds on January 1, 2022. The
bonds are due January 1, 2027, with interest payable each July 1 and January 1. The bonds
are issued at face value. Prepare Colson’s journal entries for (a) the January issuance, (b) the
July 1 interest payment, and (c) the December 31 adjusting entry.

(a) Cash...............................................................................................................
300,000
Bonds Payable.................................................................................. 300,000

(b) Interest Expense...........................................................................................15,000

Cash (€300,000 X 10% X 6/12)....................................................... 15,000

(c) Interest Expense...........................................................................................15,000

Interest Payable................................................................................ 15,000

BE14.3 (LO 1) Assume the bonds in BE14.2 were issued at 108.11 to yield 8%. Prepare the
journal entries for (a) January 1, (b) July 1, and (c) December 31.

(a) Cash (€300,000 X 1.0811)............................................................................

324,330
Bonds Payable.................................................................................. 324,330
 (b) Interest Expense (€324,330 X 8% X 6/12).................................................12,973
Bonds Payable.............................................................................................. 2,027
Cash (€300,000 X 10% X 6/12)....................................................... 15,000

(c) Interest Expense

(€324,330 – €2,027) X 8% X 6/12.............................................................12,892
Bonds Payable.............................................................................................. 2,108
Interest Payable................................................................................ 15,000
Date Cash paid Interest expense premium Carrying
324,330
15,000 324,330 x 8% x 2,027 324,330 –
½ = 12,973 2,027= 322,303
15,000 322,302 x 2,108
8%x1/2 =
12,892

BE14.4 (LO 1) Assume the bonds inBE14.2 were issued at 92.6393 to yield 12%. Prepare the
journal entries for (a) January 1, (b) July 1, and (c) December 31.

(a) Cash (€300,000 X .926393)..........................................................................277,918

Bonds Payable.................................................................................. 277,918

(b) Interest Expense (€277,918 X 12% X 6/12)...............................................16,675

Bonds Payable.................................................................................. 1,675
Cash (€300,000 X 10% X 6/12)....................................................... 15,000

(c) Interest Expense

(€277,918 + €1,675) X 12% X 6/12).........................................................16,776
Bonds Payable.................................................................................. 1,776
Interest Payable................................................................................ 15,000
Date Cash paid Interest expense discount Carrying
277,918
15,000 =277,918 x 1,675 277,918 +
=300,000 x 12% x ½= 1,675= 279,593
10% x 1/2 16,675
15,000 279,593 x 12% 1,776 279,593 +
x1/2= 16,776 1,776=

BE14.5 (LO 1) Devers plc issued £400,000 of 6% bonds on May 1, 2022. The bonds were
dated January 1, 2022, and mature January 1, 2024, with interest payable July 1 and January
1. The bonds were issued at face value plus accrued interest. Prepare Devers’ journal entries
for (a) the May 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting
entry.

(a) Cash...............................................................................................................
408,000
 Bonds Payable.................................................................................. 400,000
Interest Expense

(£400,000 X 6% X 4/12 = £8,000)................................................. 8,000

(b) Interest Expense...........................................................................................12,000

Cash (£400,000 X 6% X 6/12 = £12,000)........................................ 12,000

(c) Interest Expense...........................................................................................12,000

Interest Payable................................................................................ 12,000

BE14.6 (LO 1) On January 1, 2022, JWS Corporation issued $600,000 of 7% bonds, due in
10 years. The bonds were issued for $559,224, and pay interest each July 1 and January 1.
Prepare the company’s journal entries for (a) the January 1 issuance, (b) the July 1 interest
payment, and (c) the December 31 adjusting entry. Assume an effective-interest rate of 8%.

(a) Cash...............................................................................................................
559,224
Bonds Payable.................................................................................. 559,224

(b) Interest Expense ($559,224 X 8% X 6/12).................................................22,369

Cash ($600,000 X 7% X 6/12)......................................................... 21,000
Bonds Payable.................................................................................. 1,369

(c) Interest Expense

[($560,593 X 8% X 6/12 = $22,424)]........................................................22,424
Interest Payable................................................................................ 21,000
Bonds Payable.................................................................................. 1,424

BE14.7 (LO 1) Assume the bonds in BE14.6 were issued for $644,636 with an effective-
interest rate of 6%. Prepare the company’s journal entries for (a) the January 1 issuance, (b)
the July 1 interest payment, and (c) the December 31 adjusting entry.

(a) Cash...............................................................................................................
644,636,000
Bonds Payable.................................................................................. 644,636,000

(b) Interest Expense...........................................................................................

19,339,000
Bonds Payable..............................................................................................
1,661,000
Cash................................................................................................... 21,000,000
($644,636 X 6% X 6/12 = $19,339,000)
 ($600,000 X 7% X 6/12 = $21,000,000)

(c) Interest Expense

($642,975 X 6% X 6/12 = $19,289)...........................................................
19,289

BE14.8 (LO 1) Tan Ltd. issued HK$600,000,000 of 7% bonds on November 1, 2022, for
HK$644,636,000. The bonds were dated November 1, 2022, and mature in 10 years, with
interest payable each May 1 and November 1. The effective-interest rate is 6%. Prepare Tan’s
December 31, 2022, adjusting entry.

Interest Expense........................................................................................... 6,446,360*

Bonds Payable.............................................................................................. 553,640
Interest Payable................................................................................ 7,000,000**
*HK$644,636,000 X 6% X 2/12 = HK$6,446,360
**HK$600,000,000 X 7% X 2/12 = HK$7,000,000
BE14.9 (LO 2) Coldwell AG issued a €100,000, 4-year, 10% note at face value to Flint Hills
Bank on January 1, 2022, and received €100,000 cash. The note requires annual interest
payments each December 31. Prepare Coldwell’s journal entries to record (a) the issuance of
the note and (b) the December 31 interest payment.

(a) Cash...............................................................................................................
100,000
Notes Payable................................................................................... 100,000

(b) Interest Expense...........................................................................................10,000

Cash (€100,000 X 10% = €10,000).................................................. 10,000

BE14.10 (LO 2) Samson plc issued a 4-year, £75,000, zero-interest-bearing note to Brown
Ltd. on January 1, 2022, and received cash of £47,664. The implicit interest rate is 12%.
Prepare Samson’s journal entries for (a) the January 1 issuance and (b) the December 31
recognition of interest.

(a) Cash...............................................................................................................47,664
Notes Payable................................................................................... 47,664

(b) Interest Expense........................................................................................... 5,720

Notes Payable................................................................................... 5,720
(£47,664 X 12%)

BE14.11 (LO 2) McCormick Corporation issued a 4-year, $40,000, 5% note to Greenbush

Company on January 1, 2022, and received a computer that normally sells for $31,495. The
note requires annual interest payments each December 31. The market rate of interest for a
note of similar risk is 12%. Prepare McCormick’s journal entries for (a) the January 1
issuance and (b) the December 31 interest.

(a) Equipment....................................................................................................31,495
Notes Payable................................................................................... 31,495

(b) Interest Expense........................................................................................... 3,779

Cash................................................................................................... 2,000
Notes Payable................................................................................... 1,779
($31,495 X 12% = $3,779)
($40,000 X 5% = $2,000)
BE14.12 (LO 2) Shlee SA issued a 4-year, €60,000, zero-interest-bearing note to Garcia
Company on January 1, 2022, and received cash of €60,000. In addition, Shlee agreed to sell
merchandise to Garcia at an amount less than regular selling price over the 4-year period. The
market rate of interest for similar notes is 12%. Prepare Shlee’s January 1 journal entry.

Cash............................................................................................................... 60,000
Notes Payable................................................................................... 38,131
Unearned Sales Revenue
[€60,000 – (€60,000 X .63552) = €21,869].................................... 21,869

BE14.13 (LO 3) On January 1, 2022, Henderson Corporation retired $500,000 of bonds at

99. At the time of retirement, the unamortized premium was $15,000. Prepare Henderson’s
journal entry to record the reacquisition of the bonds.

BE14.14 (LO 3) Refer to the note issued by Coldwell AG in BE14.9. During 2022, Coldwell
experiences financial difficulties. On January 1, 2023, Coldwell negotiates a settlement of the
note by issuing to Flint Hills Bank 20,000 €1 par Coldwell ordinary shares. The ordinary
shares have a market price of €4.75 per share on the date of the settlement. Prepare
Coldwell’s entries to settle this note.

Jurnal 1 January, 2023

Notes payable 100,000
Gain on extinguishment of debt 5,000
(100,000 notes payable – 20,000 share capital
– 75,000 share premium)
Share capital-ordinary 20,000
(20,000 shares x 1 par value)
Share premium-capital 75,000
((4,75 market value – 1 par value) x 20,000
shares)

BE14.15 (LO 3) Refer to the note issued by Coldwell AG in BE14.9. During 2022, Coldwell
experiences financial difficulties. On January 1, 2023, Coldwell negotiates a modification of
the terms of the note. Under the modification, Flint Hills Bank agrees to reduce the face value
of the note to €90,000 and to extend the maturity date to January 1, 2027. Annual interest
payments on December 31 will be made at a rate of 8%. Coldwell’s market interest rate at the
time of the modification is 12%. Prepare Coldwell’s entries for (a) the modification on
January 1, 2023, and (b) the first interest payment date on December 31, 2023.

a) Present Value of Notes Payable (New)

Present Value of principal $90.000 due in
4 years at 12% ($90.000 x 0.63552) $57.196,80
Present Value of interest ($90.000 x 8% = $7.200) paid annually
4 years at 12% ($7.200 x 3.03735) $21.868,92
Fair Value of note $79.065,72

Journal Entries Debit Credit

Notes Payable (Old) $100.000
Gain on Extimguishment of Debt
$20.934
Notes Payable (New) $79.065,72

b) Interest Expense of Notes Payable

Interest Expense 12% x $79.065,72= $9.487,89

Journal Entries Debit Credit

Interest Expense $9.487,89
Cash ($90.000 x 8%) $7.200
Notes Payable $2.288,89

BE14.16 (LO 4) Shonen Knife Ltd. has elected to use the fair value option for one of its
notes payable. The note was issued at an effective rate of 11% and has a carrying value of
HK$16,000. At year-end, Shonen Knife’s borrowing rate has declined; the fair value of the
note payable is now HK$17,500. (a) Determine the unrealized gain or loss on the note and (b)
prepare the entry to record any unrealized gain or loss, assuming that the change in value was
due to general market conditions.
BE14.17 (LO 4) At December 31, 2022, Hyasaki Corporation has the following account
balances: Bonds payable, due January 1, 2030 $1,912,000 Interest payable 80,000 Show how
the above accounts should be presented on the December 31, 2022, statement of financial
position, including the proper classifications.