Soal Asistensi AK-2 Pertemuan 1

Asisten : Kinta Khristina

Materi : Non-Current Liabilities (chapter 14)

1. On April 30, 2002, Company issued 8% bonds with a par value of $900,000 due in 20
years. They were issued at 82.8 to yield 10% and were callable at 102 at any date after
April 30, 2010. Because of lower interest rates and a significant change in the
company's credit rating, it was decided to call the entries issue on April 30, 2011, and
to issue new bonds. New 6% bonds with a par value of $1,200,000 were issued at
112.5 to yield 5%; they mature in 20 years. Interest payment dates are October 31 and
April 30 for old and new bonds.
Instructions:
a. Prepare journal entries to record (i) the retirement of the old issue and (ii) the sale of
the new issue on April 30, 2011. Unamortized discount of the old bonds is $118,470.
Show the calculation of the loss on extinguishment of the old bonds. (5%)
b. Construct a bond amortization table for the new bonds to indicate the amount of
interest expense and premium amortization at each October 31 and April 30. Include
only the first two years. Make sure all columns and rows are properly labeled. (Round
to the nearest dollar). (5%)
c. Prepare the entry required on October 31, 2011, to record the payment of the first 6
months' interest and the amortization of premium on the bonds. (5%)
d. Prepare the adjusting entry to be made on December 31, 2011. (5%).

2. PT Sikukana owes Rp. 400.000.000 plus Rp. 36.000.000 of accrued interest to Bank
Mandiri, The debt is 10 year, 10% note. During 2010, PT Sikukanas business
deteriorated due to a faltering regional economy. On December 31, 2010, Bank
Mandiri agrees to accept an old machine and cancel the entire debt. The machine has
a cost of Rp. 780.000.000. Accumulated depreciation of Rp 442.000.000 and a fair
value of Rp. 360.000.000
Instruction:
a. Prepare joural entries for PT Sikukana to record this debt settlement
b. How should PT Sikukana report the gain or loss on the disposition of machine and on
restructuring of debt in its 2010 income statement?
c. Assume that, instead of transferring the machine, PT Sikukana decides to grant
15.000 of its ordinary shares (Rp. 20.000 par), which have a fair value of Rp.
360.000.000 in full settlement of the loan obligation. Prepare the entries to record the
transaction.
3. Venzuela Co. is building a new hockey arena at a cost of $2,500,000. It received a
downpayment of $500,000 from local businesses to support the project, andnow needs
to borrow $2,000,000 to complete the project. It therefore decides to issue $2,000,000
of 10.5%,10-year bonds. These bonds were issued on January 1, 2009, and pay
interest annually on each January1. The bonds yield 10%. Venzuela paid $50,000 in
bond issue costs related to the bond sale
Instructions
a. Prepare the journal entry to record the issuance of the bonds and the related bond
issue costs incurred on January 1, 2009.
b. Prepare a bond amortization schedule up to and including January 1, 2013, using
the effectiveinterestmethod.
c. Assume that on July 1, 2012, Venzuela Co. retires half of the bonds at a cost of
$1,065,000 plus accrued interest. Prepare the journal entry to record this
retirement