2. Proctec Trust Inc. issued S100,000, 5 year bond on January 1, 2018 paying 4% intereston a semi-annual basis every January I and July 1. Instructions Using a financial calculator, or tables on pg. 550-551(students can also use pre-built excel formulas if they are expert users of excel program) prepare the first year journal entries for the bond issue and interest expense assuming that the company uses the effective interest method, a market interest rate of 6% and has a year-end of December 31, 2018

2. Proctec Trust Inc. issued S100,000, 5 year bond on January 1, 2018 paying 4% intereston a semi-annual basis every January I and July 1. Instructions Using a financial calculator, or tables on pg. 550-551(students can also use pre-built excel formulas if they are expert users of excel program) prepare the first year journal entries for the bond issue and interest expense assuming that the company uses the effective interest method, a market interest rate of 6% and has a year-end of December 31, 2018

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 the first day of the fiscal year, a company issues a $8,300,000, 10%, 8-year bond that pays semiannual interest of $415,000 ($8,300,000 × 10% × ½), receiving cash of $9,267,140. Journalize the first interest payment and the amortization of the related bond premium, round to the nearest dollar. If an amount box does not require an entry, leave it blank. blank - Select - - Select - - Select - - Select - - Select - - Select -
5 0 V File C13 123456 7 89 Home 18 19 20 Insert Arial X ✓ fx Face amount of bonds Contract rate of interest Draw Term of bonds, years Market rate of interest Interest payment Page Layout く 10 Formulas DATA B ✓ ✓ V Data A B C Compute bond proceeds, amortizing discount by interest method, and interest expense Av $80,000,000 9% 5 11% Semiannual Review Amount ... View Ev ab ≡く D Using formulas and cell references, perform the required analysis, and input your answers into the Amount column. Transfer the numeric results for the green entry cells (C13:C16) into the appropriate fields in CNOWv2 10 for gradina. 11 12 13 a. PV of cash proceeds 14 b. Discount amortized for the 1st interest payment period 15 c. Discount amortized for the 2nd interest payment period 16 d. Interest expense for the 1st year 17 Help Formulas Editing ✓ Currency E $ 500 ✓ C →>>
On Jan. 1, Year 1, Foxcroft Inc. issued 90 bonds with a face value of $1,060 for $99,400. The bonds had a stated rate of 5% and paid interest semiannually. What is the journal entry to record the first payment to the bondholders? If an amount box does not require an entry, leave it blank. Jun. 30 Interest Expense Interest Expense Cash Cash
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On the first day of the fiscal year, a company issues a $500,000, 8%, 10-year bond that pays semiannual interest of $20,000 ($500,000 × 8% × 1/2), receiving cash of $530,000. Journalize the entry for the issuance of the bonds. If an amount box does not require an entry, leave it blank.
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An accounting example: Otter Products inc issued bonds on January 1, 2019. Interest to be paid semi-annually. Term in years is 2; Face value of bonds issued is $200,000; Issue Price $206,000; Specified Interest Rate each payment period is 6% Question. Calculate a. the amount of interest paid in cash every payment period. b. The amount of amortization to be recorded at each interest payment date (use straight-line method) c. complete amoritzation table by calculating interest expense and beginning and ending bond carrying amounts at the each period over 2 years. The term is for 2 years however 3 years is showing on the workbook. How do I calcuate the 3rd year if the problem only says the term is 2 years?
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Compute bond proceeds, amortizing discount by interest method, and interest expense Boyd Co. produces and sells aviation equipment. On the first day of its fiscal year, Boyd issued $80,000,000 of five-year, 9% bonds at a market (effective) interest rate of 11%, with interest payable semiannually. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. X Open spreadsheet Compute the following: a. The amount of cash proceeds from the sale of the bonds. Round your answer to the nearest dollar. $ b. The amount of discount to be amortized for the first semiannual interest payment period, using the interest method. Round your answer to the nearest dollar. $ 73,969,806 X $ c. The amount of discount to be amortized for the second semiannual interest payment period, using the interest method. Round your answer to the nearest dollar. 468,339 X $ 442,581 X d. The amount of the bond…
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