E9-7 Brainiac Company purchased a delivery truck for $30,000 on January 1, 2011. The truck has an expected salvage value of $2,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 15,000 in 2011 and 12,000 in 2012. Compute depreciation expense for 2011 and 2012 using (1) the straight-line method, (2) the units-of-activity method, and (3) the double-declining balance method.  (Round cost per mile to 2 decimal places, e.g. 10.50. Use rounded amount for future calculations. Round final answers to 0 decimal places, e.g. 125.) 2011 2012 Straight-line $ $ Units-of-Activity $ $ Double-declining Balance $ $ Assume that Brainiac uses the straight-line method. (1) Prepare the journal entry to record 2011 depreciation. (2) Show how the truck would be reported in the December 31, 2011, balance sheet. (Enter all amounts as positive amounts and subtract where necessary.) Account/Description Debit Credit $ Less: $ E10-5 Don Walls's gross earnings for the week were $1,780, his federal income tax withholding was $301.63, and his FICA total was $135.73. What was Walls's net pay for the week? (Round answer to 2 decimal places, e.g. 10.50.) $ Journalize the entry for the recording of his pay in the general journal. (Note: Use Salaries Payable; not Cash.) (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2. Round answers to 2 decimal places, e.g. 10.50.) Account/Description Debit Credit Record the issuing of the check for Walls's pay in the general journal. (Round answers to 2 decimal places, e.g. 10.50.) Account/Description Debit Credit E10-10 On January 1, Neuer Company issued $500,000, 10%, 10-year bonds at par. Interest is payable semiannually on July 1 and January 1. Prepare journal entries to record the following. The issuance of the bonds. Date Account/Description Debit Credit Jan. 1 The payment of interest on July 1, assuming that interest was not accrued on June 30. Date Account/Description Debit Credit July 1 The accrual of interest on December 31. Date Account/Description Debit Credit Dec. 31 E10-11 On January 1, Flory Company issued $300,000, 8%, 5-year bonds at face value. Interest is payable semiannually on July 1 and January 1. Prepare journal entries to record the following events. The issuance of the bonds. Date Account/Description Debit Credit Jan. 1 The payment of interest on July 1, assuming no previous accrual of interest. Date Account/Description Debit Credit July 1 The accrual of interest on December 31. Date Account/Description Debit Credit Dec. 31 E10-15 Leoni Co. receives $240,000 when i ...

1. E9-7
Brainiac Company purchased a delivery truck for $30,000 on
January 1, 2011. The truck has an expected salvage value of
$2,000, and is expected to be driven 100,000 miles over its
estimated useful life of 8 years. Actual miles driven were
15,000 in 2011 and 12,000 in 2012.
Compute depreciation expense for 2011 and 2012 using (1) the
straight-line method, (2) the units-of-activity method, and (3)
the double-declining balance method. (Round cost per mile to 2
decimal places, e.g. 10.50. Use rounded amount for future
calculations. Round final answers to 0 decimal places, e.g. 125.)
2011

2. 2012
Straight-line
$
$
Units-of-Activity
$
$
Double-declining Balance
$
$
Assume that Brainiac uses the straight-line method. (1) Prepare
the journal entry to record 2011 depreciation. (2) Show how the
truck would be reported in the December 31, 2011, balance
sheet. (Enter all amounts as positive amounts and subtract
where necessary.)
Account/Description
Debit
Credit

3. $
Less:
$

4. E10-5
Don Walls's gross earnings for the week were $1,780, his
federal income tax withholding was $301.63, and his FICA total
was $135.73.
What was Walls's net pay for the week? (Round answer to 2
decimal places, e.g. 10.50.)
$

5. Journalize the entry for the recording of his pay in the general
journal. (Note: Use Salaries Payable; not Cash.) (For multiple
debit/credit entries, list amounts from largest to smallest e.g.
10, 5, 3, 2. Round answers to 2 decimal places, e.g. 10.50.)
Account/Description
Debit
Credit
Record the issuing of the check for Walls's pay in the general
journal. (Round answers to 2 decimal places, e.g. 10.50.)
Account/Description
Debit
Credit

7. E10-10
On January 1, Neuer Company issued $500,000, 10%, 10-year
bonds at par. Interest is payable semiannually on July 1 and
January 1.
Prepare journal entries to record the following.
The issuance of the bonds.
Date
Account/Description
Debit
Credit
Jan. 1

8. The payment of interest on July 1, assuming that interest was
not accrued on June 30.
Date
Account/Description
Debit
Credit
July 1
The accrual of interest on December 31.

9. Date
Account/Description
Debit
Credit
Dec. 31

10. E10-11
On January 1, Flory Company issued $300,000, 8%, 5-year
bonds at face value. Interest is payable semiannually on July 1
and January 1.
Prepare journal entries to record the following events.
The issuance of the bonds.
Date
Account/Description
Debit

11. Credit
Jan. 1
The payment of interest on July 1, assuming no previous accrual
of interest.
Date
Account/Description
Debit
Credit
July 1

12. The accrual of interest on December 31.
Date
Account/Description
Debit
Credit
Dec. 31

13. E10-15
Leoni Co. receives $240,000 when it issues a $240,000, 10%,
mortgage note payable to finance the construction of a building
at December 31, 2011. The terms provide for semiannual
installment payments of $20,000 on June 30 and December 31.
Prepare the journal entries to record the mortgage loan and the
first two installment payments. (For multiple debit/credit
entries, list amounts from largest to smallest e.g. 10, 5, 3, 2.)
Date
Account/Description

14. Debit
Credit
2011
Dec. 31
2012
June 30
2012
Dec. 31

16. E10-18
Hrabik Corporation issued $600,000, 9%, 10-year bonds on
January 1, 2011, for $562,613. This price resulted in an
effective-interest rate of 10% on the bonds. Interest is payable
semiannually on July 1 and January 1. Hrabik uses the
effective-interest method to amortize bond premium or discount.
Prepare the journal entries to record the following. (Round
answers to 0 decimal places, e.g. 125. Use rounded amounts for
future computations.)
The issuance of the bonds. (For multiple debit/credit entries,
list amounts from largest to smallest e.g. 10, 5, 3, 2.)
Date
Account/Description
Debit
Credit
Jan. 1

17. The payment of interest and the discount amortization on July 1,
2011, assuming that interest was not accrued on June 30. (For
multiple debit/credit entries, list amounts from largest to
smallest e.g. 10, 5, 3, 2.)
Date
Account/Description
Debit
Credit
July 1

18. The accrual of interest and the discount amortization on
December 31, 2011. (For multiple debit/credit entries, list
amounts from largest to smallest e.g. 10, 5, 3, 2.)
Date
Account/Description
Debit
Credit
Dec. 31

19. P10-5A

20. Fordyce Electronics issues a $400,000, 8%, 10-year mortgage
note on December 31, 2010. The proceeds from the note are to
be used in financing a new research laboratory. The terms of the
note provide for semiannual installment payments, exclusive of
real estate taxes and insurance, of $29,433. Payments are due
June 30 and December 31.
Complete the installment payments schedule for the first 2
years. (Round answers to 0 decimal places, e.g. 125. Use
rounded amounts for future calculations.)
Semiannual
Interest Period
Cash Payment
Interest Expense
Reduction
of Principal
Principal Balance
Issue Date
$
1
$
2

21. 3
4
Prepare the entries for (1) the loan and (2) the first two
installment payments. (For multiple debit/credit entries, list
amounts from largest to smallest e.g. 10, 5, 3, 2. Round answer
to 0 decimal places, e.g. 125.)
Date
Account/Description
Debit
Credit
2010

22. Dec. 31
2011
June 30
Dec. 31

23. Show how the total mortgage liability should be reported on the
balance sheet at December 31, 2011. (Round answer to 0
decimal places, e.g. 125.)
Current liabilities
12/31/11
Long-term liabilities

24. P10-9A
Elkins Company sold $2,500,000, 8%, 10-year bonds on July 1,
2011. The bonds were dated July 1, 2011, and pay interest July
1 and January 1. Elkins Company uses the straight-line method
to amortize bond premium or discount. Assume no interest is
accrued on June 30.

25. Prepare all the necessary journal entries to record the issuance
of the bonds and bond interest expense for 2011, assuming that
the bonds sold at 104. (For multiple debit/credit entries, list
amounts from largest to smallest e.g. 10, 5, 3, 2.)
Date
Account/Description
Debit
Credit
July 1
Dec. 31

26. Prepare journal entries as in the previous part of the question
assuming that the bonds sold at 98. (For multiple debit/credit
entries, list amounts from largest to smallest e.g. 10, 5, 3, 2.)
Date
Account/Description
Debit
Credit
July 1
Dec. 31

27. Show balance sheet presentation for each bond issue at
December 31, 2011. (Enter all amounts as positive amounts and
subtract where necessary.)
Premium
Long-term Liabilities
$
Add:
$

28. Discount
Long-term Liabilities
$
Less: