4) Assume the bond is redeemed at 94 on May 1, 2022. Record the redemption of the bond with the calculations included
4) Assume the bond is redeemed at 94 on May 1, 2022. Record the redemption of the bond with the calculations included
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 6PB: Edward Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...
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Question
please answer last subpart only
![On October 31, 2021, Flowing Wind Company issued a $3,500,000, 10-year bond at
7% when the market rate was 8%. It was sold at 93, and they will account for interest
on the bond using the effective interest rate calculation method. Interest payments
are made on April 30, and October 31 of each year. Party Décor Company's year-end
is December 31.
Required:
1) Prepare the appropriate journal entries related to this bond for 2021, including all
calculation
2) Show the bonds payable net value reported on the balance sheet as of December
31, 2021
3) Prepare the journal entry related to the first interest payment in 2022, including
all calculations.
4) Assume the bond is redeemed at 94 on May 1, 2022. Record the redemption of
the bond with the calculations included](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8d27235d-d881-4d40-83cc-2bdca25ec252%2F45a304ae-7cf0-468c-8a58-ec1842d8eabe%2Fy6bime_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On October 31, 2021, Flowing Wind Company issued a $3,500,000, 10-year bond at
7% when the market rate was 8%. It was sold at 93, and they will account for interest
on the bond using the effective interest rate calculation method. Interest payments
are made on April 30, and October 31 of each year. Party Décor Company's year-end
is December 31.
Required:
1) Prepare the appropriate journal entries related to this bond for 2021, including all
calculation
2) Show the bonds payable net value reported on the balance sheet as of December
31, 2021
3) Prepare the journal entry related to the first interest payment in 2022, including
all calculations.
4) Assume the bond is redeemed at 94 on May 1, 2022. Record the redemption of
the bond with the calculations included
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