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# ACC 557 Week 6 Chapter 10 (E10-9, E10-12, E10-15, P10-1A) LATEST

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ACC 557 Week 6 Chapter 10 (E10-9, E10-12, E10-15, P10-1A)

E10-9: Global Airlines is considering two alternatives for the financing of a purchase of a fleet of airplanes. These two alternatives are: ............
It is estimated that the company will earn \$800,000 before interest and taxes as a result of this purchase. The company has an estimated tax rate of 30% and has 90,000 shares of common stock outstanding prior to the new financing.
Determine the effect on net income and earnings per share for these two methods of financing. ............
E10-12:  Pueblo Company issued \$300,000 of 5-year, 8% bonds at 98 on January 1, 2014. The bonds pay interest twice a year.
a) Prepare the journal entry to record the issuance of the bonds. ............
Compute the total cost of borrowing for these bonds.
b) Prepare the journal entry to record the issuance of the bonds, assuming the bonds were issued at 104. ............
Compute the total cost of borrowing for these bonds, assuming the bonds were issued at 104. ............
E10-15:  Tucki Co. receives \$240,000 when it issues a \$240,000, 8%, mortgage note payable to finance the construction of a building at December 31, 2014. The terms provide for semiannual installment payments of \$17,660 on June 30 and December 31.
Prepare the journal entries to record the mortgage loan and the first two installment payments. ............
P10-1A: On January 1, 2014, the ledger of Shumway Company contains the following liability accounts. ............
a) Journalize the January transactions............
b) Journalize the adjusting entries at January 31 for the outstanding notes payable. (Hint: Use one-third of a month for the DeKalb Bank note.) ............
c) Prepare the current liabilities section of the balance sheet at January 31, 2014. Assume no change in accounts payable. ............