2. Horngren Corporation issues 10-year bonds with a face value of $20,000,000 and a stated annual interest rate of 6%. The bonds pay interest semiannually on June 30 and December 31. The annual market rate of interest on the date of issue is 6%. 3. Morgan Company issues 30-year bonds with a face value of $20,000,000 and a stated annual interest rate of 5%. The bonds pay interest annually on December 31. The annual market rate of interest on the date of issue is 4%.

2. Horngren Corporation issues 10-year bonds with a face value of $20,000,000 and a stated annual interest rate of 6%. The bonds pay interest semiannually on June 30 and December 31. The annual market rate of interest on the date of issue is 6%. 3. Morgan Company issues 30-year bonds with a face value of $20,000,000 and a stated annual interest rate of 5%. The bonds pay interest annually on December 31. The annual market rate of interest on the date of issue is 4%.

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, Elias Corporation issued 9% bonds with a face value of $75,000. The bonds are sold for $72,750. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, 10 years from now. Elias records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31 of the first year is a.$6,750 b.$6,975 c.$2,250 d.$563
Ellis Company issues 6.5%, five-year bonds dated January 1, 2021, with a $250,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $255,333. The annual market rate is 6% 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.
On January 1, Bramble Corp. issued 10 year, S6,000,000, 9% bonds for $6,842,830. The market rate of interest for these bonds is 79%. Interest is payable annually on December 31 (note that these bonds are ANNUAL bonds). Bramble uses the effective-interest method of amortizing bond premium. At the end of the second year, Bramble should report unamortized bond premium of Group of answer choices $722.000 $716,556 5691,933 $319,093
Alvarez Corporation issued $130,000 par value, 8%, 4-year bonds (i.e., there were 130 of $1,000 par value bonds in the issue). Interest is payable semiannually each January 1 and July 1 with the first interest payment due at the end of the period on July 1. Determine the issue price of the bonds if the market rate of interest is 6%. Future Value of $1 table Future Value of an Ordinary Annuity table Future Value of an Annuity Due table Present Value of $1 table Present Value of an Ordinary Annuity table Present Value of an Annuity Due table Determine the issue price of the bonds. (Use the present value and future value tables, the formula method, a financial calculator, or a spreadsheet for your calculations. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, X.XXXXX. Round your final answers to the nearest whole dollar.) The issue price of the bonds =
On January 1 of the current year, Barton Corporation issued 10%, 5-year bonds with a face value of $100,000. The bonds are sold for $95,000. The bonds pay interest semiannually on June 30 and December 31, and the maturity date is December 31, 5 years from now. Barton records straight-line amortization of the bond discount. The bond interest expense for the current year ended December 31 is a. $11,500 b. $5,000 c. $500 d. $11,000
On January 1, Elias Corporation issued 10% bonds with a face value of $100,000. The bonds are sold for $97,000. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, 10 years from now. Elias records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31 of the first year is a. $10,000 b. $3,000 C. $833 d. $10,300
Belmont Corporation issues $100,000 of 7% bonds, due in 10 years, when the market rate of interest is 5%. Interest is paid semiannually on June 30 and December 31. The issue price of the bonds is:
Pearl Corporation issues $390,000 of 9% bonds, due in 11 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%. Compute the issue price of the bonds. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places, e.g. 58,971.) Issue price of the bonds $______
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Montana Inc. issued $900,000 of 12-year bonds with a stated rate of 8% when the market rate was 9%. The bonds pay interest semi-annually. Assume that the bonds were issued for $883,386. Prepare an amortization table for the first three payments. Semiannual Interest Period Semiannual Interest Expense Semiannual Interest Payment Amortization of Discount Ending Carrying Value 1 2 3 PLEASE NOTE: All dollar amounts will be rounded to whole dollars using "$" and commas as needed (i.e. $12,345).
Franklin corporation issues $86,000, 10%, 5 year bonds on January 1st for $89,900. Interest paid semi-annually on January 1st and July 1st. Is Franklin uses the straight line method of amortization of bond premium, the amount of bond interest expense to be recognized on July 1st is