(Use the following information for questions 2 and 3) Always Be Counting Co. issued callablebonds on January 1, 2016. ABC's accountant has created the following amortization schedulefrom issuance until maturity: olqar zi ning of boong noilmogtoo olosu12 gnello stated in traDate1/1/20166/30/201612/31/20166/30/201712/31/20176/30/201812/31/2018 0006/30/201912/31/2019Show Transcribed TextCash as the Effectiveinteresta.3%b. 3.5%Ⓒ6%d. 7%interest$7,0007,0007,0007,0007,0007,000no 07,0007,000a.No gain or loss.b. $3,717 gain.c. $6,000 loss.d. $2,283 loss.$6,21110 $207,020 Star W$789206,2306,187813205,4176.163837204,5806,137863203,7176,112888202,8296,085 vol 915 a 201,913 pent200,971200,000Decrease in Outstanding Carrybalance6,0570943A6,029What was the market rate of interest on ABC's bonds at the time of issuance?GI9712. What was the market rate of interest on ABC's bonds at the time of issuance?CV. IInt expense =*JCarrying000,0026,0850x15olue0202,829 xl 6101,415 i12682 3726,08ID(₁6,085 =6,085=ai=3. ABC calls the bonds at 103 immediately after the interest payment on 12/31/2017 and retiresthem in full. What gain or loss, if any, would ABC record on this date?Cash 2.0 7,020-

I have checked the answer given by you for question 2 and the solution is correct. The market rate…

Answered: 6% d. 7% 3. ABC calls the bonds at 103…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Ee.92.
A4
If $457,000 of 8% bonds are issued at 94, what is the amount of cash received from the sale? Select the correct answer. A. $420,440 B. $457,000 C. $429,580 D. $493,560
3.On January 1, a company retired $800,000 face value bonds at a call price of 103. The bonds were originally issued for $848,000. On the retirement date the bonds had an unamortized premium of $28,352. The entry to retire the debt would include a: debit to bonds payable for $828,352 credit to cash for $853,203 credit to gain for $4,352 credit to premium for $28,352 debit to loss for $52,203 a. 36 b. C. d. e. kw
8. A bond issued with a par value of $200,000 and a carrying amount of $195,500 is retired at 98.5. The gain or loss on this transaction is: discont = 4500 Bond Payabl 200000 A) $3,000 loss. B) $3,000 gain. C) $1,500 loss. D) $1,500 gain. discout Debit 4500 199901.5
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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
A $300,000 bond was redeemed at 104 when the carrying amount of the bond was $316,000. The entry to record the redemption would include a Oa. loss on bond redemption of $3,000 Ob. gain on bond redemption of $3,000 Oc. loss on bond redemption of $4,000 Od. gain on bond redemption of $4,000 7 a I' B in 20 D W 14 Previous Next ^04) O
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Effective Interest MethodE8B. Danner Company sold $500,000 of 8 percent, 20-year bonds on April 1, 2014,at 105. The semiannual interest payment dates are March 31 and September 30. Themarket interest rate is 7.5 percent. The company’s fiscal year ends September 30. Usethe effective interest method to calculate the amortization.1. With regard to the bond issue on April 1, 2014:a. How much cash is received?b. How much is Bonds Payable?c. What is the difference between a and b called and how much is it?2. With regard to the bond interest payment on September 30, 2014:a. How much cash is paid in interest?b. How much is the amortization?c. How much is interest expense?3. With regard to the bond interest payment on March 31, 2015:a. How much cash is paid in interest?b. How much is the amortization? (Round to the nearest cent.)c. How much is interest expense?
PPODIENI2(TOPUIILS The Sleepy Corporation issued $1,000,000 of ten year bonds on January 1, 2019. The interest rate on the bonds is 9%, and the interest is paid semi-annually on July 1 and January of each year. The bonds were issued at 102. The straight-line method for amortizing discounts and premiums is used. a. Were the bonds issued at a discount or premium? b. Prepare the journal entries on 1. January 1, the date the bonds were issued December 31, 2019, for the year end journal entry to record interest expense and amortization of discount/premium 2. c. Calculate the total amount of interest expense on the 2019 income statement. d. Calculate the carry value of the bonds on December 31, 2019
A company has callable bonds outstanding with a par value of $100,000 The unamorticed discount on these bonds is $1,500. The company called to retire these bonde and paid a cal premsum (bonus) of $3,000 What is the gain or loss on this retirement? OA $3.000 koss OB 50 gain or loss OC. $4,500 loss OD. $1,500 gain

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6% d. 7% 3. ABC calls the bonds at 103 immediately after the interest payment on 12/31/2017 and retires 6,085 101,415 1 them in full. What gain or loss, if any, would ABC record on this date? ID( Cash 207,020. a. No gain or loss. b. $3,717 gain. c. $6,000 loss. d. $2,283 loss.