A comapny has issued a $162, 000, 3 year, zero interest bond dated January 1, 2023. The market interest rate for similar bonds was 11 %. Assume the company used the effective interest method of amortization. Prepare a schedule of bond discount/premium amortization. (Round answers to 0 decimal places, e.g. 5, 275. Do not leave any answer field blank. Enter 0 fo

A comapny has issued a $162, 000, 3 year, zero interest bond dated January 1, 2023. The market interest rate for similar bonds was 11 %. Assume the company used the effective interest method of amortization. Prepare a schedule of bond discount/premium amortization. (Round answers to 0 decimal places, e.g. 5, 275. Do not leave any answer field blank. Enter 0 fo

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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Bonds with a stated interest rate of 9% and a face value totaling $610,000 were issued for $634 400 on January 1.2021 whe market interest rate was 8%. The company uses effective-interest bond amortization Required: Determine the carrying value of the bonds at December 31, 2022. (Round your answer to nearest whole dolar) Carrying Value
On June 30, 2021, the market interest rate is 5%. Champs Corporation issues $600,000 of 10%, 30-year bonds payable. The bonds pay interest on June 30 and December 31. The company amortizes bond premium using the effective-interest method. Read the requirements. Requirement 1. Use the PV function in Excel to calculate the issue price of the bonds. (Round your answer to the nearest whole dollar.) The issue price of the bonds is Requirements 1. 2. 3. Use the PV function in Excel to calculate the issue price of the bonds. Prepare a bond amortization table for the first four semiannual interest periods. Record the issuance of bonds payable on June 30, 2021; the payment of interest on December 31, 2021; and the payment of interest on June 30, 2022. Print Done X
On August 1, 2022, Bramble Corp. issued $482,400, 8%, 10-year bonds at face value. Interest is payable annually on August 1. Bramble’s year-end is December 31. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Aug. 1 enter an account title to record the issuance of the bonds on August 1 enter a debit amount enter a credit amount enter an account title to record the issuance of the bonds on August 1 enter a debit amount enter a credit amount eTextbook and Media List of Accounts Prepare the journal entry to record the accrual of interest on December 31, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 enter an…
The balance sheet for Pina Colada Consulting reports the following information on July 1, 2022. Long-term liabilities Bonds payable Less: Discount on bonds payable $1,280,000 51,200 $1,228,800 Pina Colada decides to redeem these bonds at 105 after paying annual interest. Prepare the journal entry to record the redemption on July 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
PB6. 13.3 Edward Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $480,000. Interest is payable semiannually. The discount is amortized using the straightline method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. Dec. 31, 2018: entry to record payment of interest to bondholders C. Dec. 31, 2018: entry to record amortization of discount
2. On January 1, 2020, Dawson Inc. issued bonds with a face value of $400,000 and coupon interest rate of 5%. The bonds pay interest semi-annually on July 1 and January 1. The market rate at January 1, 2020 is 4%. (a) Are the bonds being issued at a premium or a discount? (b) Prepare the journal entry for the issue, assuming the bonds are issued at 101.4. (No explanation required.) (c) Record the entry for the first interest payment at July 1, 2020. (No explanation required.)
How to calculate the issue price of the bonds with normal calculator?
ony Hawk's Adventure (THA) issued callable bonds on January 1, 2021. THA's accountant has projected the following amortization schedule from issuance until maturity: Date cash paid Interest Expense Increase in carrying value carrying value 01/01/2021 $218,690 06/30/2021 $11,500 $13,121 $1,621 220,311 12/31/2021 11,500 13,219 1,719 222,030 06/30/2022 11,500 13,322 1,822 223,852 12/31/2022 11,500 13,431 1,931 225,783 06/30/2023 11,500 13,547 2,047 227,830 12/31/2023 11,500 13,670 2,170 230,000 THA issued the bonds for: Multiple Choice $230,000. $218,690. $299,000. Cannot be determined from the given information.
Lopez Plastics Co. (LPC) issued callable bonds on January 1, 2021. LPC's accountant has projected the following amortizatic schedule from issuance until maturity: Cash Effective Decrease in Date Outstanding interest interest balance balance 1/1/2021 24 207,020 6/30/2021 2$ 7,000 $4 6,211 24 789 206,230 12/31/2021 7,000 6,187 813 205,417 6/30/2022 7,000 6,163 837 204,580 12/31/2022 7,000 6,137 863 203,717 6/30/2023 7,000 6,112 888 202,829 12/31/2023 7,000 6,085 915 201,913 943 200,971 6/30/2024 7,000 6,057 971 200,000 7,000 6,029 12/31/2024 LPC issued the bonds:
Blossom Company issued $510,000 of 5-year, 9% bonds at 96 on January 1, 2022. The bonds pay interest annually. (a1) Your answer is correct. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Cash Discount on Bonds Payable Bonds Payable Your answer is incorrect. Compute the total cost of borrowing for these bonds. Total cost of borrowing eTextbook and Media List of Accounts - Your answer is partially correct. Account Titles and Explanation Interest Expense (DZ). Premium on Bonds Payable $ Interest Payable Prepare the journal entry to record the issuance of the bonds, assuming the bonds were issued at 104. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Total cost of borrowing Debit eTextbook and Media $ 489600 Debit 20400 Compute the total cost of borrowing for these bonds, assuming the bonds were…