On the first day of its fiscal year, Chin Company issued $24,900,000 of five-year, 6% bonds to finance its operations of producing and selling home improvement products.Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 8%, resulting in Chin receiving cash of $22,880,286.a. Journalize the entries to record the following:1. Issuance of the bonds.2. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar)3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.)If an amount box does not require an entry, leave it blank.1.b. Determine the amount of the band interest expense for the first year.c. Why was the company able to issue the bonds for only $22,880,286 rather than for the face amount of $24,900,000?The market rate of interest isthe contract rate of interest. Therefore, inventors;bonds.Check My Workwilling to pay the full face amount of thePreviousNext

Bonds are frequently utilized by governments and enterprises to finance a wide range of projects,…

Answered: 1. Issuance of the bonds. 2. First…

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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E10.7 (LO 2) (Analyze instalment payment schedule.) The following instalment payment schedule is for a long-term bank loan payable: Interest Period Issue date 1 2 3 4 5 Instructions Cash Payment $23,097.48 23,097.48 23,097.48 23,097.48 23,097.48 Interest Expense $5,000.00 4,095.13 3,145.01 2,147.38 1,099.88 Reduction of Principal $18,097.48 19,002.35 19,952.47 20,950.10 21,997.60 Principal Balance $100,000.00 81,902.52 62,900.17 42,947.70 21,997.60 0 ☐ a. Assuming payments are made annually, what is the interest rate on the bank loan? b. Prepare the journal entry to record the first instalment payment. c. What are the current and non-current portions of the bank loan after the payment at the end of period 2? Σ
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.
Required journal entries Total cash payment = 500000*10%*1/2 = $25, 000 Discount on bonds payable = (10240/64) *4 = $640 My question is the formula of the Total cash payment and Discount on bonds payable.
am. 123.
Nn.141. Subject:- Account
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4. What is the carrying value of the bonds at the end of the second period (third number)? Premium 57,913.01 Carrying value (bonds) 432,913.01 Face Rate Market Rate Semiannual payments a. b. Cash Payment C. d. e. 14% 10% 0 or 1 2 or 3 4 or 5 6 or 7 8 or 9 Interest Expense Today Period #1 26,250.00 Period #2 26,250.00 Carrying value at end of second period (third number) ___________?__ 2. Disc. or Prem. Amort. 21,645.65 21,415.43 Disc. or Prem. 4,604.35 4,834.57 57,913.01 53,308.66 48,474.10 Face Value 375,000.00 375,000.00 375,000.00 Carrying Value 432,913.01 428,308.66 423,474.10
balance sheet on december 31,year 1 and december 31year 2 are presented below: assets dec 31 year 1 dec 31 year 2 liabilites dec 31 year 1 dec 31 year 2 cash 50 000 60 000 trade accounts payable 62 000 49 000 accounts receivable 95 000 89 000 interest payable 8 000 11 000 allowance for uncollectible accounts (4 000) (3 000) bonds payables 200 000 200 000 inventory 120 000 140 000 unamortized bond discount (15 000) (10 000) property plant and equipment 295 000 340 000 Equity 199 000 257 000 accumlated depreciation (102 000) (119 000) total assets 454 000 507 000 total liabilities 454 000 507 000 additional information for year 2 : cash payents to suppliers of merchandise were 180 000 sales revenue was 338 000 3 000 of accounts receivables was written off equipment was acquired for 65 000 depreciation expense was 30 000 interest expenses was 20 000 based on the above information calculate the following : 1. the cost of goods sold year 2. 2.…
12:43 1 ul LTE A v2.cengagenow.com Determine Due Date and Interest on Notes Determine the due date and the amount of interest due at maturity on the following notes: Date of Note Face Amount Interest Rate Term of Note January 10* $40,000 5% 90 days a. b. March 19 18,000 180 days June 5 90,000 30 days C. d. September 8 36,000 90 days e. November 20 27,000 60 days *Assume that February has 28 days. Assume 360-days in a year when computing the interest. Note Due Date Interest (a) Apr. 10 (b) Sept. 15 (c) July 5 (d) Dec. 7 (e) Jan. 19
Tr.17.
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7.Compute the principal (in $) for the loan. Use ordinary interest when time is stated in days. Principal Rate (%) Time Interest $ 7 1 1 2 years $735

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1. Issuance of the bonds. 2. First semiannual interest payment. The be 3. Second semiannual interest payment. The If an amount box does not require an entry. 1. 2. 000 000