1. Lime Co. sells $600,000 of 9% bonds on April 1, 2020. The bonds pay interest on October 1 and April 1. The due date of the bonds is October 1, 2024. The bonds yield 8%. Give entries through December 31, 2021. 2. Lemon Co. sells $1,000,000 of 10% bonds on August 1, 2020. The bonds pay interest on February 1 and August 1. The due date of the bonds is August 1, 2023. The bonds yield 12%. On October 1, 2021, Lemon Co. buys back $200,000 worth of bonds for $218,000 (includes accrued interest). Give entries through February 1, 2022. structions ound to the nearest dollar.) r the two cases prepare all of the relevant journal entries from the time of sale until the date indicated. Use the effective- erest method for discount and premium amortization (construct amortization tables where applicable). Amortize premium discount on interest dates and at year-end. (Assume that no reversing entries were made.)

1. Lime Co. sells $600,000 of 9% bonds on April 1, 2020. The bonds pay interest on October 1 and April 1. The due date of the bonds is October 1, 2024. The bonds yield 8%. Give entries through December 31, 2021. 2. Lemon Co. sells $1,000,000 of 10% bonds on August 1, 2020. The bonds pay interest on February 1 and August 1. The due date of the bonds is August 1, 2023. The bonds yield 12%. On October 1, 2021, Lemon Co. buys back $200,000 worth of bonds for $218,000 (includes accrued interest). Give entries through February 1, 2022. structions ound to the nearest dollar.) r the two cases prepare all of the relevant journal entries from the time of sale until the date indicated. Use the effective- erest method for discount and premium amortization (construct amortization tables where applicable). Amortize premium discount on interest dates and at year-end. (Assume that no reversing entries were made.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Instructions On the first day of the fiscal year, a company issues a $1,450,000, 5% , five-year bond that pays semiannual interest of $36,250 ($1,450,000 x 5% *%), receiving cash of $1,408,720. Journalize the first interest payment and the amortization of the related bond discount Round to the nearest dollar. Refer to the Chart of Accounts for exact wording of account titles Journal DATE DESCRIPTION JOURNAL POST REF DEBIT CREDIT
Issuing Bonds at a Premium On the first day of the fiscal year, a company issues a $1,600,000, 6%, 6-year bond that pays semiannual interest of $48,000 ($1,600,000 × 6% × ½), receiving cash of $1,682,063. Journalize the bond issuance. If an amount box does not require an entry, leave it blank. 日

On the first day of the fiscal year, a company issues a $5,000,000, 10%, 4-year bond that pays semiannual interest of $250,000 ($5,000,000 × 10% × ½), receiving cash of $5,336,638. Journalize the bond issuance. If an amount box does not require an entry, leave it blank.
On the first day of the fiscal year, a company issues a $900,000, 9%, 5-year bond that pays semiannual interest of $40,500 ($900,000 x 9% × 1/2), receiving cash of $884,176. Journalize the entry for the issuance of the bonds.If an amount box does not require an entry, leave it blank
On January 1, 2024, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: Payment Cash Payment Effective Interest Increase in Balance Outstanding Balance 6,095,749 1 228,000 243,830 15,830 6,111,579 2 228,000 244,463 16,463 6,128,042 3 228,000 245,122 17,122 6,145,164 4 228,000 245,807 17,807 6,162,971 5 228,000 246,519 18,519 6,181,490 6 228,000 247,260 19,260 6,200,750 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 38 228,000 295,564 67,564 7,456,656 39 228,000 298,266 70,266 7,526,922 40 228,000 301,078 73,078 7,600,000 Required: What is the face amount of the bonds? What is the initial selling price of the bonds? What is the term to maturity in years? Interest is determined by what approach? What is the stated annual interest rate? What is the effective annual interest rate? What is the total cash interest paid over the term to maturity? What is the total effective interest…
On the first day of the fiscal year, a company issues a $980,000, 8%, 5-year bond that pays semiannual interest of $39,200 ($980,000 x 8% x 1/2), receiving cash of $884,174. Journalize the entry for the issuance of the bonds. If an amount box does not require an entry, leave it blank.
On January 1, the first day of the fiscal year, a company issues a $1,550,000, 12%, five-year bond that pays semiannual interest of $93,000 ($1,550,000 x 12% x %), receiving cash of $1,503,140. Required: Journalize the first interest payment and the amortization of the related bond discount. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered
5
On January 1, 2024, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: Payment Cash Payment Effective Interest Increase in Balance Outstanding Balance 6,627,273 1 320,000 331,364 11,364 6,638,637 2 320,000 331,932 11,932 6,650,569 3 320,000 332,528 12,528 6,663,097 4 320,000 333,155 13,155 6,676,252 5 320,000 333,813 13,813 6,690,065 6 320,000 334,503 14,503 6,704,568 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 38 320,000 389,107 69,107 7,851,247 39 320,000 392,562 72,562 7,923,809 40 320,000 396,191 76,191 8,000,000 Required: What is the face amount of the bonds? What is the initial selling price of the bonds? What is the term to maturity in years? Interest is determined by what approach? What is the stated annual interest rate? What is the effective annual interest rate? What is the total cash interest paid over the term to maturity?…
N6. Account
Temptation Vacations issues $58 million in bonds on January 1, 2021, that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: (1) (2) (3) (4) (5) Cash Paid for Interest Interest Expense Decrease in Carrying Value Carrying Value Date 1/1/2021 $65,279,805 6/30/2021 $1,740,000 1,631,995 $108,005 $65,279,805 12/31/2021 1,740,000 1,629,295 $110,705 65,171,800 6. What is the total cash paid for interest assuming the bonds mature in 20 years? (Enter your answer in dollars, not millions. (i.e., $5.5 million should be entered as 5,500,000)) Total cash interest
On the first day of the fiscal year, a company issues a $7,300,000, 8%, 10-year bond that pays semiannual interest of $292,000 ($7,300,000 × 8% × ½), receiving cash of $5,991,433. Journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.