Calculate the total amount of interest expense recorded

Assignment Help Accounting Basics

Reference no: EM13239037

Part A
On December 31, 2013 Nat Sass Inc (NSI) restructures a $1178073 debt with its bank (A note payable of $1100000 plus accrued interest o $78073). The bank(1) forgives the $78073 of accrued interest and $100000 o principal, (2) extends the maturity date from December 31, 2014 to December 31, 2016, and (3) reduces the interest rate from 10% to the market interest rate (8%) which is to be paid annually.

1. Prepare the jurnal entry to record this restructuring on December 31, 2013
2. Prepare any necessary journal entry on December 31, 2014
3. Assume NSI was allowed the terms stated above except the new stated interest rate was reduced to 3%. Calculat te gain to be reconized i any on December 31, 2013.

Part B
Sass issued 5 year $100000 face value bonds paying semiannual interest with a stated rate of 4%. The company sold these bonds on January 1, 2013 when the market interest rate was 5%.
Calculate the total amount of interest expense recorded for the year ended Decmber 31, 2013.

Required minimum-1 page

Reference no: EM13239037

Questions Cloud

What is dollar difference in total and the average variable : Assuming the cost curves have the usual shape, is the dollar difference between the average total cost and the average variabe cost greater when the output is 10,000 tennis balls or when the output is 30,000 tennis balls

How did the great depression affect europe : How did the Great Depression affect Europe, the United States and the Americas? Include any attempts to end or ease the Depression

Find the speed will rocket b reach : Two rockets having the same acceleration start from rest, but rocket A travels for twice as much time as rocket B, If rocket A reaches a speed of 390m/s , what speed will rocket B reach

How much will consumer and producer surplus : A small country imports a product with a world price of $9. The domestic industry is composed of numerous small firms who together have a supply function Q = 2P/3. The domestic demand function is Q = 40 - 2P. There is a tariff of $3 per unit.

Calculate the total amount of interest expense recorded : Calculate the total amount of interest expense recorded for the year ended Decmber 31, 2013.

Explain what happens to argentine beef consumption : Under free trade, Argentina exports beef. Its government imposes a tax t on exports. Draw and label a diagram to show what happens to Argentine beef consumption, production, exports, domestic prices, consumer and producer surplus

Determine the maximum potential difference : Suppose two parallel conducting plates are separated by 0.45 cm of air. Find the maximum potential difference between the two parallel conducting plates in kV

What is the effective rate of protection on clothing : At world prices, cotton is 25% of the cost of clothing and labor and capital costs are 75%. What is the effective rate of protection on clothing if the tariff on cotton is .1 and the tariff on clothing is .4

Explain what is an infant industry : explain a diagram for an industry in a developing country where infant industry protection might be a good idea. What are arguments for and against governments in developing countries giving infant industry protection to new industries.

User Account

All Pages