Talkington Electronics issues a $400,000, 8%, 15-year mortgage note on December 31, 2016. The proceeds from the note are to be used in financing a new research laboratory. The terms of the note provide for annual installment payments, exclusive of real estate taxes and insurance, of$59,612. Payments are due on December 31.

Instructions (a) Prepare an installment payments schedule for the first 4 years. (b) Prepare the entries for (1) the loan and (2) the first installment payment. (c) Show how the total mortgage liability should be reported on the balance sheet at December 31, 2017.

On January 1, 2017, 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. JWS uses the effective-interest method. 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%.

Lorance Corporation issued $400,000, 7%, 20-year bonds on January 1, 2017, for$360,727. This price resulted in an effective-interest rate of 8% on the bonds. Interest is payable annually on January 1. Lorance uses the effective-interest method to amortize bond premium or discount. Instructions Prepare the journal entries to record the following. (Round to the nearest dollar.) (c) The payment of interest on January 1, 2018

Lorance Corporation issued $400,000, 7%, 20-year bonds on January 1, 2017, for$360,727. This price resulted in an effective-interest rate of 8% on the bonds. Interest is payable annually on January 1. Lorance uses the effective-interest method to amortize bond premium or discount. Instructions Prepare the journal entries to record the following. (Round to the nearest dollar.) (b) The accrual of interest and the discount amortization on December 31, 2017.

The following is taken from the Colaw Company balance sheet.

$$\begin{array}{c} \textbf{COLAW COMPANY}\\ \textbf{Balance Sheet (partial)}\\ \textbf{December 31,2017}\\ \end{array}$$

$$\begin{array}{lrr} \text{Current liabilities}\\ \hspace{15pt}{\text{Interest payable( for 12 months from January 1 to December 31)}}&&\$210,000\\ \text{Long-term liabilities}\\ \hspace{15pt}{\text{Bonds payable, 7\\\% due January 1, 2027)}}&\$3,000,000\\ \hspace{15pt}{\text{Add: Premium on bonds payable)}}&\underline{200,000}&3,200,000\\ \end{array}$$

Interest is payable annually on January 1. The bonds are callable on any annual interest date. Colaw uses straight-line amortization for any bond premium or discount. From December 31, 2017, the bonds will be outstanding for an additional 10 years (120 months).

Instructions (a) Journalize the payment of bond interest on January 1, 2018. (b) Prepare the entry to amortize bond premium and to accrue the interest due on December 31, 2018. (c) Assume that on January 1, 2019, after paying interest, Colaw Company calls bonds having a face value of $1,200,000. The call price is 101. Record the redemption of the bonds. (d) Prepare the adjusting entry at December 31, 2019, to amortize bond premium and to accrue interest on the remaining bonds.

Gridley Company issued $800,000, 11%, 10-year bonds on December 31, 2016, for$730,000. Interest is payable annually on December 31. Gridley Company uses the straight-line method to amortize bond premium or discount.

Instructions Prepare the journal entries to record the following. (a) The issuance of the bonds.

Laudie Company issued $400,000 of 9%, 10-year bonds on January 1, 2017, at face value. Interest is payable annually on January 1, 2018.

Instructions Prepare the journal entries to record the following events. (a) The issuance of the bonds.

Nasreen Company issues $2 million, 10-year, 8% bonds at 97, with interest payable each January 1.

(a) Prepare the journal entry to record the sale of these bonds on January 1, 2017.

The financial statements of Louis Vuitton are presented in Appendix F. Instructions for accessing and using the company’s complete annual report, including the notes to its financial statements, are also provided in Appendix F.

Instructions Use the company’s annual report to answer the following questions. (a) According to the notes to the fi nancial statements, what is the composition of long-term gross borrowings?

Bond or debt securities pay a stated rate of interest. This rate of interest is dependent on the risk associated with the investment. Also, bond prices change when the risks associated with those bonds change. Standard & Poor’s provides ratings for companies that issue debt securities.

Address: www.standardandpoors.com/ratings/definitions-and-faqs/en/us, or go to www.wiley.com/college/weygandt

Instructions Go to the website shown and answer the following questions. (a) Explain the meaning of an “A” rating. Explain the meaning of a “C” rating.

Solve the problem. The temperature T in a metal sphere is inversely proportional to the distance from the center of the sphere (the origin: (0, 0, 0)). The temperature at point (1, 2, 2) is $120 ^ { \circ } \mathrm { C }$. a. Find the rate of change of the temperature at point (1, 2, 2) in the direction toward point (2, 1, 3). b. Show that, at any point in the sphere, the direction of greatest increase in temperature is given by a vector that points toward the origin.

Temperature at a point A flat metal plate is positioned in an $x y$-plane such that the temperature $T\left(\right.$ in ${ }^{\circ} \mathrm{C}$ ) at the point $(x, y)$ is inversely proportional to the distance from the origin. If the temperature at the point $P(3,4)$ is $20^{\circ} \mathrm{C}$, find the temperature at the point $Q(24,7)$.

Describe the two major obligations incurred by a company when bonds are issued.

Streep Factory provides a 2-year warranty with one of its products which was first sold in 2017. Streep sold $1,000,000 of products subject to the warranty. Streep expects$125,000 of warranty costs over the next 2 years. In that year, Streep spent $70,000 servicing warranty claims. Prepare Streep’s journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs.