Reference no: EM133104476

Question 1 - Guillon Corp. issues a new set of 12 percent, 20-year bonds in the amount of $2,200,000 on February 1, 2020. The bonds sell at 102.00 and pay interest on January 31 and July 31.

Required - Record (a) the issuance of the bonds on February 1, (b) the payment of interest on July 31, (c) the accrual of interest on December 31, and (d) the payment of interest on January 31, 2021. Assume Guillon Corp. amortizes the premium by the straight-line method.

Question 2 - Sharon Kader and Emerson Wyndon are forming a partnership to develop a craft beer brewing company. Kader contributes cash of $400,000 and land appraised at $80,000 with a building which has a current market value of $210,000. When Kader purchased the land in 2014, its cost was $260,000. The partnership will assume Kader's morgtage on the property in the amount of $145,000. Wyndon contributes cash of $600,000 and equipment with a current market value of $80,000.

Required -

1. Journalize the partnership's receipt of assets and liabilities on October 15. Record this as a compound journal entry for both partners.

2. Compute the partnership's total assets, total liabilities, and total partners' equity immediately after organizing.

Question 3 - Martin and Baker decided to form a partnership. Martin contributed equipment (book value $77,000), inventory (paid $24,000), and $12,000 cash. The equipment and inventory have a current market value of $44,000 and $18,000, respectively. Martin also had a debt of $24,000 for the equipment. Baker contributed office equipment (book value $56,000) and cash of $64,000. The current market value of the office equipment is $28,000. The two partners fail to agree on a profit-and-loss-sharing ratio. For the first month (June), the partnership lost $4,200.

1. How much of this loss goes to Martin? How much goes to Baker?

2. The partners withdrew no assets during June. What is each partner's Capital balance at June 30? Prepare a T-account for each partner's Capital.