LATIH SOAL M2-1 TEORI debt (2) -pelunasan

Tulis ulang soal pertama, terjemahkan ke bahasa Indonesia, lalu jawaban di

bawahnya. Lanjutkan tulis ulang soal berikutnya, lalu jawaban di bawahnya,
dan seterusnya.
Please rewrite this each exercise first, then translate into Indonesian language,
and finally answer the questions!
Please complete at least 3 exercises

Tulis tangan kertas A4

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E14-14 (Entry for Retirement of Bond; Bond Issue Costs) On January 2, 2012, Prebish Corporation
issued $1,500,000 of 10% bonds to yield 11% due December 31, 2021. Interest on the bonds is payable
annually each December 31. The bonds are callable at 101 (i.e., at 101% of face amount), and on January
2, 2015, Prebish called $1,000,000 face amount of the bonds and retired them.
Instructions
(a) Determine the price of the Prebish bonds when issued on January 2, 2012.
(b) Prepare an amortization schedule for 2012–2016 for the bonds.
(c) Ignoring income taxes, compute the amount of loss, if any, to be recognized by Prebish as a
result of retiring the $1,000,000 of bonds in 2015 and prepare the journal entry to record the
retirement.

E14-17 (Settlement of Debt) Strickland Company owes $200,000 plus $18,000 of accrued interest to
Moran State Bank. The debt is a 10-year, 10% note. During 2015, Strickland’s business deteriorated due
to a faltering regional economy. On December 31, 2015, Moran State Bank agrees to accept an old
machine and cancel the entire debt. The machine has a cost of $390,000, accumulated depreciation of
$221,000, and a fair value of $180,000.
Instructions
(a) Prepare journal entries for Strickland Company to record this debt settlement.
(b) How should Strickland report the gain or loss on the disposition of machine and on restructuring
of debt in its 2015 income statement?
(c) Assume that, instead of transferring the machine, Strickland decides to grant 15,000 of its ordinary
shares ($10 par), which have a fair value of $180,000 in full settlement of the loan obligation.
Prepare the entries to record the transaction.

E14-18 (Loan Modification) On December 31, 2015, Sterling Bank enters into a debt restructuring
agreement with Barkley Company, which is now experiencing financial trouble. The bank agrees to
restructure a 12%, issued at par, £3,000,000 note receivable by the following modifications:
1. Reducing the principal obligation from £3,000,000 to £2,400,000.
2. Extending the maturity date from December 31, 2015, to January 1, 2019.
3. Reducing the interest rate from 12% to 10%. Barkley’s market rate of interest is 15%.
Barkley pays interest at the end of each year. On January 1, 2019, Barkley Company pays £2,400,000 in
cash to Sterling Bank.
Instructions
(a) Can Barkley Company record a gain under the term modification mentioned above? Explain.
(b) Prepare the amortization schedule of the note for Barkley Company after the debt modification.
(c) Prepare the interest payment entry for Barkley Company on December 31, 2017.
(d) What entry should Barkley make on January 1, 2019?

E14-21 (Fair Value Option) Fallen Company commonly issues long-term notes payable to its various
lenders. Fallen has had a pretty good credit rating such that its effective borrowing rate is quite low (less
than 8% on an annual basis). Fallen has elected to use the fair value option for the long-term notes
issued to Barclay’s Bank and has the following data related to the carrying and fair value for these notes.
(Assume that changes in fair value are due to general market interest rate changes).

Instructions
(a) Prepare the journal entry at December 31 (Fallen’s year-end) for 2015, 2016, and 2017, to record the
fair value option for these notes.
(b) At what amount will the note be reported on Fallen’s 2016 statement of financial position?
(c) What is the effect of recording the fair value option on these notes on Fallen’s 2017 income?
(d) Assuming that general market interest rates have been stable over the period, does the fair value
data for the notes indicate that Fallen’s creditworthiness has improved or declined in 2017? Explain.
(e) Assuming the conditions that exist in (d), what is the effect of recording the fair value option on
these notes in Fallen’s income statement in 2015, 2016, and 2017?