1. On January 1, 2024, Lansing Group issued $1,000,000 of 6% bonds, dated January 1. Interest is payablesemiannually on June 30 and December 31. The bonds mature in five years. The market yield for bondsof similar risk and maturity is 8%.INSTRUCTIONS:1.Determine the price of these bonds that are issued to yield the 8% market rate using the TimeValue of Money Tables. Include the table and relevant components for each factor used.2. Record the issuance of these bonds by Lansing Group.3.Prepare an amortization schedule that determines interest at the effective rate through thematurity date of the bonds.4.Prepare the entries to record the interest on June 30, 2024, and December 31, 2024.5. Assume that Lansing Group retires the bonds on January 1, 2026, paying $1,027,544. Prepare theentry to record the retirement.

The objective of the question is to determine the price of the bonds, record the issuance, prepare…

Answered: 1. On January 1, 2024, Lansing Group…

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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NoleCo issues bonds on January 1, 20X1. The bonds mature ten years from this date and pay interest semi-annually on June 30 and December 31 each year. The face value of the bonds is $800,000 and the coupon/stated rate is 10%. The market rate on the issue date is 11%. The bonds were issued for $752,198.Required: Complete the three parts below.Part A: The interest expense that NoleCo should recognize on June 30, 20X1 is:$40,000$44,000$37,610$42,112$41,371Part B: The interest expense that NoleCo should recognize on December 31, 20X1 is:$41,295$41,446$40,000$42,206$44,000Part C: The carrying value of these bonds on December 31, 20X1 (after the interest payment on that date) is:$800,000$753,569$755,015$752,198$756,516
Ellis Company issues 8.0%, five-year bonds dated January 1, 2021, with a $530,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $540,871. The annual market rate is 7.5% on the issue date. Required: 1. Compute the total bond interest expense over the bonds' life. 2. Prepare an effective interest amortization table for the bonds' life. 3. Prepare the journal entries to record the first two interest payments. Please need answer for all with working please answer do not waste time or question by holding attempt if you can otherwise skip
On January 1, 2024, Wildhorse Co. issued eight-year bonds with a face value of $6010000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 12%. Table values are: Present value of 1 for 8 periods at 10% 0.46651 Present value of 1 for 8 periods at 12% 0.40388 Present value of 1 for 16 periods at 5% 0.45811 Present value of 1 for 16 periods at 6% 0.39365 Present value of annuity for 8 periods at 10% Present value of annuity for 8 periods at 12% Present value of annuity for 16 periods at 5% Present value of annuity for 16 periods at 6% 5.33493 4.96764 10.83777 10.10590 The present value of the principal is O $2365837. O $2427319. O $2753241. O $2803725.
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. On 1/1/21, Ehrlich Co. issued 4 year bonds with a face value of $700,000. The stated (bond) rate is 8%, payable semiannually on 1/1 and 7/1. The market rate at the time of issuance was 10%. a. Calculate the issue price of the bonds. b. Prepare the journal entry for the issuance of the bonds. c. Complete the amortization table below. Date cash paid interest expense amortization carrying value 1/1/21 7/1/21 1/1/22 7/1/22 d. Prepare the journal entries for the 7/1/21 interest payment and amortization, 12/31/21 interest accrual and amortization, and 1/1/22 interest payment. e. Prepare the journal entry for retirement of the bonds at maturity f. Assume instead that the bonds were redeemed on 7/1/22 at 102. Prepare the journal entry.
Waldron Corporation issued $900,000 of 16%, 10-year bonds payable on January 1, 2022. The market interest rate at the date of issuance was 14%, and the bonds pay interest semiannually (on June 30 and December 31). Waldron Corporation's year-end is June 30. Read the requirements 1. Using the PV function in Excel, calculate the issue price of the bonds. (Round your answer to the nearest whole dollar) The issue price of the bonds is Requirements 1. Using the PV function in Excel, calculate the issue price of the bonds. 2. Prepare an effective-interest amortization table for the bonds through the first three interest payments, Round amounts to the nearest dollar. 3. Record Waldron Corporation's issuance of the bonds on January 1, 2022, and payment of the first semiannual interest amount and amortization of the bond premium on June 30, 2022 Explanations are not required Print Done
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Temptation Vacations issues $60 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:Required:1. Were the bonds issued at face amount, a discount, or a premium?2. What is the original issue price of the bonds?3. What is the face amount of the bonds?4. What is the stated annual interest rate?5. What is the market annual interest rate?6. What is the total cash paid for interest assuming the bonds mature in 20 years?

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