A CalculatorOn January 1, the Kings Corporation issued 10% bonds with a face value of $118,000. The bonds are sold for $115,640. Thebonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, ten years from now.Kings records straight-line amortization of the bond discount. Determine the bond interest expense for the year endedDecember 31 of the first year is.Select the correct answer.$12,036$2,360$11,564$11,8004:20 PM

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Answered: A Calculator On January 1, the Kings…

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, Year 1, Twain Corporation sold $620,000 of its own 5 percent, 10-year bonds. Interest is payable annually on December 31. The bonds were sold to yield an effective interest rate of 6 percent. Twain uses the effective interest rate method. The bonds sold for $574,368. Requireda. Prepare the journal entry for the issuance of the bonds.b. Prepare the journal entry for the amortization of the bond discount and the payment of the interest at December 31, Year 1. (Assume effective interest amortization.)c. Prepare the journal entry for the amortization of the bond discount and the payment of interest on December 31, Year 1. (Assume straight-line amortization.)d. Calculate the amount of interest expense for Year 2. (Assume effective interest amortization.) e. Calculate the amount of interest expense for Year 2. (Assume straight-line amortization.)
Eagle Corporation issued $9,950,000, 6 percent bonds dated April 1, year 1. The market interest rate was 7 percent, with interest paid each March 31. The bonds mature in three years, on March 31, year 4. Eagle's fiscal year ends on December 31. Use Table 8C1, Table BC.2. Required: 1. What was the issue price of these bonds? (Round time value factor to 4 decimal places. Round the final answer to the nearest whole dollar.) Answer is complete but not entirely correct. Bond issue price $ 9,688,881 2. Compute the interest expense for the period ended December 31, year 1. The company uses the effective-interest method of amortization. (Round time value factor to 4 decimal places. Round intermediate and final answer to the nearest whole dollar.) Answer is complete and correct. Interest expense $ 508,666 3. Show how the bonds should be reported on the statement of financial position at December 31, year 1. (Round intermediate and final answer to the nearest whole dollar.) Answer is complete…
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On Jan. 1, Year 1, Foxcroft Inc. issued 120 bonds with a face value of $1,020 for $126,300. The bonds had a stated rate of 5% and paid interest semi-annually. What is the journal entry to record the issuance of the bonds? If an amount box does not require an entry, leave it blank. Jan. 1
Fill in the Blank Question Î A company issues $100,000 of 5%, 10-year bonds dated January 1. The bonds pay interest semiannually on June 30 and December 31 each year. If the bonds are sold at par value, the issuer records the sale with a debit to in the amount of $
The Merchant Company issued 10-year bonds on January 1. The 9% bonds have a face value of $93,000 and pay interest every January 1 and July 1. The bonds were sold for $112,168 based on the market interest rate of 7%. Merchant uses the effective interest method to amortize bond discounts and premiums. On July 1 of the first year, Merchant should record interest expense (round to the nearest dollar) of $3,926 $5,048 $3,255 $4,185
On January 1, Topeka Outfitters issued $175,000 of 6%, 3-year bonds when the market rate of interest was 10%. The bonds pay interest semiannually on June 30 and December 31. A. How much are the proceeds that Topeka Outfitters? will receive on the issue date of the bonds? B. Prepare an amortization table for the bond issue. C. If the bonds are retired at the end of Year 2 at 104.5% of the maturity value, how much gain or loss on retirement will be reported?
On Jan. 1, Year 1, Foxcroft Inc. issued 110 bonds with a face value of $1,000 for $113,900. The bonds had a stated rate of 5% and paid interest semi-annually. What is the journal entry to record the issuance of the bonds? If an amount box does not require an entry, leave it blank. Jan. 1 fill in the blank 2 fill in the blank 3 fill in the blank 5 fill in the blank 6 fill in the blank 8 fill in the blank 9
On January 1, Year 1, Hanover Corporation issued bonds with a $39,000 face value, a stated rate of interest of 8%, and a 5-year term to maturity. The bonds were issued at 97. Hanover uses the straight-line method to amortize bond discounts and premiums. Interest is payable in cash on December 31 each year. How much interest expense will Hanover report on its income statement on December 31, Year 1? Multiple Choice O O O O $234 $1,170 $3.354 $3,120
F.
On January 1, Shanghai Fashions issued $325,000 of 6%, 3-year bonds when the market rate of interest was 10%. The bonds pay interest semiannually on June 30 and December 31. A. How much are the proceeds that Shanghai Fashions Company will receive on the issue date of the bonds? B. Prepare an amortization table for the bond issue. C. If the bonds are retired at the end of Year 2 at 104.5% of the maturity value, how much gain or loss on retirement will be reported?

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