1. 2. On January 1, 2025, Pina Company issued $132,000 of 7%, 10-year bonds at par. Interest is payable quarterly on April 1, July 1, October 1, and January 1. On June 1, 2025, Grouper Company issued $84,000 of 11%, 10-year bonds dated January 1 at par plus accrued interest. Interest is payable semiannually on July 1 and January 1. For each of these two independent situations, prepare journal entries to record the following.

1. 2. On January 1, 2025, Pina Company issued $132,000 of 7%, 10-year bonds at par. Interest is payable quarterly on April 1, July 1, October 1, and January 1. On June 1, 2025, Grouper Company issued $84,000 of 11%, 10-year bonds dated January 1 at par plus accrued interest. Interest is payable semiannually on July 1 and January 1. For each of these two independent situations, prepare journal entries to record the following.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On January 1, 2025, Stellar Corporation issued $450,000 of 7% bonds, due in 10 years. The bonds were issued for $423,783, and pay interest each July 1 and January 1. Stellar uses the effective-interest method. Prepare the company's journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Assume an effective-interest rate of 8%. (Round answers to O decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.)
Presented below are two independent situations. 1. On January 1, 2020, Headland Company issued $396,000 of 9%, 10-year bonds at par. Interest is payable quarterly on April 1, July 1, October 1, and January 1. 2. On June 1, 2020, Sage Company issued $348,000 of 12%, 10-year bonds dated January 1 at par plus accrued interest. Interest is payable semiannually on July 1 and January 1. For each of these two independent situations, prepare journal entries to record the following. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) The issuance of the bonds. (b) The payment of interest on July 1. (c) The accrual of interest on December 31.
1. On January 1, 2025, Waterway Company issued $408,000 of 9%, 10-year bonds at par. Interest is payable quarterly on April 1. July 1, October 1, and January 1. 2. On June 1, 2025, Wildhorse Company issued $360,000 of 11%, 10-year bonds dated January 1 at par plus accrued interest. Interest is payable semiannually on July 1 and January 1. For each of these two independent situations, prepare journal entries to record the following. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) a. The issuance of the bonds. b. The payment of interest on July 1. с The accrual of interest on December 31. Date Account Titles and Explanation Debit Credit 1. Waterway Company: 2. Wildhorse Company:
Crane Company issued $255,000 , 7%, 10-year bonds on January 1, 2022, for $273,767 . This price resulted in an effective-interest rate of 6% on the bonds. Interest is payable annually on January 1. Crane uses the effective-interest method to amortize bond premium or discount. (a) Prepare the journal entry to record the issuance of the bonds. (Round answers to decimal places, e.g. 15,250 . Credit account titles are automatically indented when amount is entered . Do not indent manually
6. Farhan Corporation issued $ 1,000,000 of 8%, 28-year bond on January 1, 2020, at 84.95 to yield 8%. Interest is payable semi-annually on July 1 and January 1. Prepare journal entries to record following: (a) The issuance of bonds (b) The payment of interest and related amortization on July 1, 2020 (c) The accrual of interest and related amortization on December 31, 2020
On January 1, 2018, Ellison Co. issued 8-year bonds with a face value of $300,000 and a stated interest rate of 7%, payable semiannually on June 30 and December 31. The bonds were sold to yield 10%. What is the issue price of the bonds?
On March 1, 2024, Baddour, Incorporated, issued 10% bonds, dated January 1, with a face amount of $160 million. • The bonds were priced at $143.50 million (plus accrued Interest) to yield 12%. • The price if Issued on January 1 would have been $140.75 million. Interest is paid semiannually on June 30 and December 31. • Baddour's fiscal year ends September 30. Required: 1. to 3. What would be the amount(s) related to the bonds Baddour would report in its balance sheet, Income statement and statement of cash flows for the year ended September 30, 2024? Note: Enter your answers in whole dollars. Negative amounts should be indicated by a minus sign. Balance sheet: Bonds payable (net) Cash Income statement: Interest expense Statement of cash flows: Financing activities Operating activities
Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $63,948 on January 1, 2021. The market interest rate for bonds of similar risk and maturity is 8%. Interest is paid semiannually on June 30 and December 31. Required: 1. & 2. Record the bond issue and first interest payment on June 30, 2021. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your intermediate computations and final answers to the nearest whole dollar amount.)
Rose Corporation issued $360,000 of 6%, 10-year bonds on January 1, 2024, for $311,075. This price provided a vield of 8% on the bonds. Interest is payable semiannually on June 30 and December 31, If Rose uses the effective-interest method and assume fiscal year ends on October 31, what is the carrying value of bonds reported on the October 31, 2024 balance sheet? $312.062 O$313.125 $313.857 O $312.718
On February 1, 2021, Sanford & Son issued 12% bonds dated February 1, 2021, with a face amount of $110,000. The bonds sold for $128,876 and mature in 20 years. The effective interest rate for these bonds was 10%. Interest is paid semiannually on July 31 and January 31. Sanford & Son's fiscal year is the calendar year. Required:1. Prepare the journal entry to record the bond issuance on February 1, 2021.2. Prepare the entry to record interest on July 31, 2021, using the straight-line method.3. Prepare the necessary journal entry on December 31, 2021.4. Prepare the necessary journal entry on January 31, 2022.
On March 1, 2024, Baddour, Incorporated, issued 10% bonds, dated January 1, with a face amount of $160 million. The bonds were priced at $142.00 million (plus accrued interest) to yield 12%. The price if issued on January 1 would have been $139.25 million. Interest is paid semiannually on June 30 and December 31. Baddour’s fiscal year ends September 30. Required: 1. to 3. What would be the amount(s) related to the bonds Baddour would report in its balance sheet, income statement and statement of cash flows for the year ended September 30, 2024?
On February 1, Clayton Co. issued $1,300,000 of 20-year, 9% bonds for $1,225,000. Interest is payable semiannually on February 1 and August 1. Present the entries to record the following transactions: