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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. ............