Name ID# Lab Day & Time Group Assignment #1 - Accounting for a long-term note payable Learning Objective 1 On January 1, 2018, Lakeman-Fay signed a $1,500,000, 15-year, 7% note. The loan required Lakeman-Fay to make annual payments on December 31 of $100,000 principal plus interest. Requirements 1. Journalize the issuance of the note on January 1, 2018 2. Journalize the first note payment on December 31, 2018. 3. How much principal does Lakeman-Fay owe after the first annual payment on December 31, 2018 #2 - Determining bond prices Learning Objective 2 Bond prices depend on the market rate of interest, stated rate of interest, and time. Determine whether the following bonds payable will be issued at face value, at a premium, or at a discount: a. The market interest rate is 4%. Denton issues bonds payable with a stated rate of 4%. b. Starkville issued 8% bonds payable when the market interest rate was 8.25%. c. Houston issued 6% bonds when the market interest rate was 5%. d. Federal issued bonds payable that pay the stated interest rate of 5.5%. At issuance, the market interest rate was 7.75%. Demonstration 1 Accounting for mortgages payable Learning Objective 1 Ember Company purchased a building with a market value of $280,000 and land with a market value of $55,000 on January 1, 2018. Ember Company paid $15,000 cash and signed a 25-year, 12% mortgage payable for the balance. Requirements 1. Journalize the January 1, 2018, purchase. 2. Journalize the first monthly payment of S3,370 on January 31, 2018. (Round to the nearest dollar.) 3. How much principal does Ember Company owe after the first monthly payment on January 31, 2018? Demonstration 2 Determining bond prices Learning Objective 2 Bond prices depend on the market rate of interest, stated rate of interest, and time. Determine whether the following bonds payable will be issued at face value, at a premium, or at a discount: a. The market interest rate is 8%. Idaho issues bonds payable with a stated rate of 7.75%. b. Austin issued 9% bonds payable when the market interest rate was 8.25%. c. Cleveland's Cars issued 10% bonds when the market interest rate was 10%. d. Atlanta's Tourism issued bonds payable that pay the stated interest rate of 8.5%. At issuance, the market interest rate was 10.25%