@CPA Dreamer, thank you for that. One of those things you know, but when in the weeds of the detail just seems to slip your mind. Like pushing out the simple to make room for the complex.
It's quiet here tonight…everyone busy studying? I am just about to start – said goodbye to my best friend who is leaving for CA in the morning. Time to kick some notecards' butt! Even though it's SO tempting to lounge on the couch with the house to myself…
I'm here with you oilgas–Just got home from playing Bingo with my dad for his birthday–it's our tradition. I hope I have better results studying this weekend than I did at Bingo. Power Weekend in full effect!
I'm going to try to put in a few hours tonight and I'm studying from the time I wake up until the time I go to sleep tomorrow with the exception of a one hour appointment I have tomorrow.
I'm here, been writing notes off and on, I'm going to continue writing until I start falling asleep…
Florida:
AUD: 73, 81! Thank you Lord!
BEC: 73, 77! Thank you Lord! and WTB
REG: 71, 82! Thank you Lord! and A71
FAR: 72, 78! Thank you God and my Mommy in Heaven!
CPA Excel, Ninja Notes & Audio, Wiley Test Bank, CPAreviewforfree
Can anyone shed some light on this bond question? I am wondering why 3 months of accrued interest is not reported vs 8. Shouldnt there have been an interest payment Oct1? What am I missing?
Question: On June 1 of the current year, Cross Corp. issued $300,000 of 8% bonds payable at par with interest payment dates of April 1 and October 1. In its income statement for the current year ended December 31, what amount of interest expense should Cross report?
Answer:The requirement is to determine the amount of interest expense that should be reported. This answer is correct because seven months of interest should be accrued, or $14,000 = ($300,000 Ă— 8% Ă— 7/12).
I was thinking that b/c the bond was issued on 6/1, that's 7 months to 12/31 so that's why 7/12 months was used to calculate interest expense.
Florida:
AUD: 73, 81! Thank you Lord!
BEC: 73, 77! Thank you Lord! and WTB
REG: 71, 82! Thank you Lord! and A71
FAR: 72, 78! Thank you God and my Mommy in Heaven!
CPA Excel, Ninja Notes & Audio, Wiley Test Bank, CPAreviewforfree
@ Oilgas Upon further booth review I am overturning my original call. I think I do understand. They weren't asking the question the way I am used to hearing it. They asking for the YTD Interest Exp amt (In its income statement for the current year ended December 31). IMO they could have worded that better.
6/1-9/30 (300,000*.08) 4/12 Dr Interest Exp $8000
Cr Interest Payable $8000
10/1 Dr Interest Payable $8000
Cr Cash $8000
10/1-12/31 (300,000*.08) 3/12 Dr Interest Exp $6000
@tee tee I can decide if I under or over thought that one. The inital read made me think only about Oct-Dec. But then as I went back to RRTMFQ this sentence stuck out like a sore thumb “In its income statement for the current year ended December 31” Translated into english What's the YTD amt for interest expense.
Yes, the way you wrote out the entries look correct, so perfect example of how we need to know JEs for MCQs because they will ask for just one portion of the entries.
Florida:
AUD: 73, 81! Thank you Lord!
BEC: 73, 77! Thank you Lord! and WTB
REG: 71, 82! Thank you Lord! and A71
FAR: 72, 78! Thank you God and my Mommy in Heaven!
CPA Excel, Ninja Notes & Audio, Wiley Test Bank, CPAreviewforfree
Author
Replies
Viewing 15 replies - 826 through 840 (of 6,668 total)
.