At the beginning of current year, Case Company issuedP5,000,000 of 12% nonconvertible bonds payable at 103 whichIn addition, each P1,000 bond was issued with 30 detachableshare warrants, each of which entitled the bondholder tpurchase, for P50, one ordinary share of Case. Company, parOn the date of issuance, the quoted market value of eachwarrant was P4. The market value of the bonds ex-warrantsProblem 7-11 (AICPA Adapted)are due in five years.tovalue P25.at the time of issuance is 95.1. What is the carrying amount of the bonds payabledate of issuance?on thea. 5,000,000b. 4,750,000c. 5,150,000d. 4,550,0002. What amount of the proceeds from the bond issue shouldbe recognized as an increase in shareholders' equity?a. 600,000b. 300,000c. 200,000d. 400,0003. What amount is credited to share premium if all of theshare warrants are exercised?a. 4,350,000b. 3,750,000c. 4,150,000d.

Bonds payable seems to be a liability account typically includes the amount owing by the issuers to…

1. What is the carrying amount of the bonds payable on the purchase, for P50, one ordinary share of Case. Company, par share warrants, each of which entitled the bondholder to In addition, each P1,000 bond was issued with 30 detachable At the beginning of current year, Case Company 18sued Problem 7-11 (AICPA Adapted) P5,000,000 of 12% nonconvertible bonds payable at 103 are due in five years. which value P25. On the date of issuance, the quoted market value of ce warrant was P4. The market value of the bonds ex-warran at the time of issuance is 95. date of issuance? a. 5,000,000 b. 4,750,000 c. 5,150,000 d. 4,550,000 What amount of the proceeds from the bond issue should be recognized as an increase in shareholders' equity? a. 600,000 b. 300,000 c. 200,000 d. 400,000 What amount is credited to share premium if all of the share warrants are exercised? . 4,350,000 - 3,750,000 4,150,000

1. What is the carrying amount of the bonds payable on the purchase, for P50, one ordinary share of Case. Company, par share warrants, each of which entitled the bondholder to In addition, each P1,000 bond was issued with 30 detachable At the beginning of current year, Case Company 18sued Problem 7-11 (AICPA Adapted) P5,000,000 of 12% nonconvertible bonds payable at 103 are due in five years. which value P25. On the date of issuance, the quoted market value of ce warrant was P4. The market value of the bonds ex-warran at the time of issuance is 95. date of issuance? a. 5,000,000 b. 4,750,000 c. 5,150,000 d. 4,550,000 What amount of the proceeds from the bond issue should be recognized as an increase in shareholders' equity? a. 600,000 b. 300,000 c. 200,000 d. 400,000 What amount is credited to share premium if all of the share warrants are exercised? . 4,350,000 - 3,750,000 4,150,000

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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The Fuller Company issued a $500,000, 5-year, 6% bond at par. It is a semiannual bond with interest paid on June 30th and December 31st. The entry to record the sale of the bond would include a: A. $500,000 credit to Cash. B. $500,000 credit to Bonds Payable. C. $30,000 debit to Interest Expense. D. $500,000 debit to Accounts Payable.
5. What is the carrying amount of the bonds payable on January 1,2020? A. 5,000,000 B. 4,750,000 C. 5,150,000 D. 4,550,000 E. None of the above
Shurwood Ltd. issued 5,130,000 6%, 10-year, nonconvertible bonds with detachable warrants for $5,250,000. Shortly after issuance, the warrants trade for $309,000 in total, and the bonds were trading at 80, or $5,060,000, ex-warrants (i.e., without warrants attached).Required:1. Provide the journal entry to record the transactions. 2. Provide the journal entry to record the first payment of interest on the convertible bond assuming that the bonds pay interest annually. Effective interest rate is 6.50%
Granville Company issued a $6,300,000 in 8%, 10-year bonds when the market rate of interest is 10%. Interest is paid semiannually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Determine the issue price of Granville's the bond. (Round your final answer to nearest whole dollar.) Bond issue price
7. What amount is credited to share premium if all of the share warrants are exercised? A. 4,350,000 B. 3,750,000 C. 4,150,000 D. 0 E. None of the above
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I. Metro Company purchased $500,000, 10%, 5-year bonds on January 1, 20x1, with interest payable on July 1 and January 1. The market interest rate (yield) was 8% for bonds of similar risk and maturity. The market value on December 31, 20x1 was $555,000 and all bonds were sold for $507,500 on January 1, 20x2 after the second payment. Required: compute the bond price on January 1, 20x1, prepare the amortization schedule and record journal entries on January 1, 20x1, July 1, 20x1, December 31, 20x1 and January 1, 20x2 assuming the bond investment is classified as available-for-sale security.
Requirement 2 (50%) Record the following transactions in the General Journal: When the market rate was 12%, Winnifred Corp. issued $2,000,000, 14%, 5-year bonds. Interest is payable semiannually on June 30 and December 31. The corporation uses the effective interest method of amortizing bond premium or discount. (It would be a good idea to construct a bond amortization schedule) Issued 20,000 Common Shares for 50,000 cash. Declared cash dividends in the amount of $50,000 to be distributed to the shareholders of record on March 9. Dividends will be paid on March 15. Declared a 1 for 2 stock split on Common Shares outstanding. Paid the cash dividend declared on Mar 5. Made the first interest payment on the bond. The company uses the effective interest method. Repurchased 10,000 common shares, the market price was $5 per share. Jan 1 Jan 1 Mar 5 Mar 10 Mar 15 Jun 30 July 20 Jun 30 Made the first interest payment on the bond. The company uses the effective interest method. July 20…
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