# Sikes Corporation, whose annual accounting period ends on December 31, issued the following bonds: Date of bonds: January 1, 2018

Sikes Corporation, whose annual accounting period ends on December 31, issued the following bonds: Date of bonds: January 1, 2018 Maturity amount and date: $300,000 due in 10 years (December 31, 2027) Interest: 10 percent per year payable each December 31 Date issued: January 1, 2018 Required: For each of the three independent cases that follow, provide the amounts to be reported on the January 1, 2018, financial statements immediately after the bonds are issued. TIP: See Exhibit 10.5 for an illustration distinguishing Bonds Payable from their carrying value. (Deductions should be indicated by a minus sign.) ### Answers Case A (issued at 100) Case B(at 97) Case C(at 101)$300,000                             $291,000$303,000

The financial statements for Case A

Long term liabilities:

Bonds payable $300,000 The financial statements for Case B Long term liabilities: Bonds payable$300,000

Unamortized discount $9,000 The financial statements for Case C Long term liabilities: Bonds payable$300,000

Unamortized premium $3,000 Question in order: See the first image attached Answer and Explanation: Reported amount as of 1, January 2018 after bonds were issued is as below CASE A CASE B CASE C Issued at 100 Issued at 95 issued at 103 a. Bonds Payable$130,000          $130,000$130,000

b. Discount Premium     $0$6,500              $3,900 Discount Premium 130,000×(100 130,000×(100- -95)⁰/₀ 103)⁰/₀ c. Carrying value$130,000          $123,500$133,900

payable bonds would be the maturity amount or face value of bonds. The bonds payable would remain same, that is, \$130,000 in each case.

In case B, the discount is calculated because the bonds are issued at a price which is less than the face value

in case C, The premium is calculated when the bond are issued at a price that is more than the face value

Carrying value will be calculated by deducting the discount from the bond s payable or by adding the premium in the bonds payable Cis te correct i think i c idk but i think it is c
Wite quickly without over thinking .

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