The following situations are independent of each other.InstructionsFor situation (a) and situation (b), prepare the entry to "redeem" the bonds.a) MCo. redeemed $140,000 face value, 9% bonds on April 30, 2022, at 101. Thecarrying value of the bonds at the redemption date was $126,500. The bondspay annual interest, and the interest payment due on April 30, 2022, has beenmade and recorded.To create the journal entry:(1) Bonds are "redeemed" at face value (DR "Bonds R").(2) calculate CASH paid out to redeem bonds (a $1,000 bond redeemed at 102 means cashpaid out (a CR) of $1,020).(3) calculate "premium" or "discount" on bonds payable by (face value - carrying value). Ifcarrying value LESS THAN face value = a "discount" (CR "discount on..."). If carrying valueGREATER THAN face value = a "premium" (DR "premium on...").(4) Calculate gain or loss on redemption by plugging in DR $ ("loss...") or CR $ ("gain...") sothat total $ DR = total $ CR.Situation (a) journal entry (Read the "How To" in the green area above!)(1)(4)(2)(3)[Loss on redemption = Carrying value of bond - (face value of bond x % pd.)]b) QCorp redeemed $170,000 face value, 12.5% bonds on June 30, 2022, at 98.The carrying value of the bonds at the redemption date was $184,000. Thebonds pay annual interest, and the interest payment due on June 30, 2022, hasbeen made and recorded.Situation (b) journal entry (Read the "How To" in the green area above!)(1)(3)(2)(4)[Gain on redemption = Carrying value of bond - (face value of bond x % pd.)]

Bond is financial instrument which is used to raise the fund by the large organizations. Bond has a…

Answered: a) MCo. redeemed $140,000 face value,…

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

ChapterMB: Model-building Problems

Section: Chapter Questions

Problem 13M

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Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $540,000. Interest is payable annually. The premium is amortized using the straightline method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. June 30, 2019: entry to record payment of interest to bondholders C. June 30, 2019: entry to record amortization of premium D. June 30, 2020: entry to record payment of interest to bondholders E. June 30, 2020: entry to record amortization of premium
Aggies Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018, and received $540,000. Interest is payable semi-annually. The premium is amortized using the straight-line 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 premium
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 straight-line 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
On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?
On Jan. 1, Year 1, Foxcroft Inc. issued 100 bonds with a face value of $1,000 for $104,000. The bonds had a stated rate of 6% and paid interest semiannually. What is the journal entry to record the issuance of the bonds?
Wilbury Corporation issued 1 million of 13.5% bonds for 985,071.68. The bonds are dated and issued October 1, 2019, are due September 30, 2020, and pay interest semiannually on March 31 and September 30. Assume an effective yield rate of 14%. Required: 1. Prepare a bond interest expense and discount amortization schedule using the straight-line method. 2. Prepare a bond interest expense and discount amortization schedule using the effective interest method. 3. Prepare adjusting entries for the end of the fiscal year December 31, 2019, using the: a. straight-line method of amortization b. effective interest method of amortization 4. If income before interest and income taxes of 30% in 2020 is 500,000, compute net income under each alternative. 5. Assume the company retired the bonds on June 30, 2020, at 98 plus accrued interest. Prepare the journal entries to record the bond retirement using the: a. straight line method of amortization b. effective interest method of amortization 6. Compute the companys times interest earned (pretax operating income divided by interest expense) for 2020 under each alternative.
Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market rate of 4%. The bonds paid interest semi-annually on June 30 and Dec. 31. How much money did the company receive when the bonds were issued? The bonds would be quoted at what rate?
(b) Prepare an effective-interest amortization table for the first eight interest payments for these bonds. (c) The Bonds were redeemed on January 1, 2026 (after the interest had been paid and recorded) at 102. Prepare the journal entry for the redemption of the bonds.
The situations presented here are independent of each other.For each situation, prepare the appropriate journal entry for the redemption of the bonds. Kingbird, Inc. redeemed $168,000 face value, 14.5% bonds on June 30, 2022, at 99. The carrying value of the bonds at the redemption date was $181,440. The bonds pay annual interest, and the interest payment due on June 30, 2022, has been made and recorded. Date Account Titles and Explanation Debit Credit Jun. 30 enter an account title for the journal entry on June 30enter an account title for the journal entry on June 30
The situations presented here are independent of each other.For each situation, prepare the appropriate journal entry for the redemption of the bonds. Pina Colada Corp. redeemed $136,000 face value, 9% bonds on April 30, 2022, at 101. The carrying value of the bonds at the redemption date was $122,808. The bonds pay annual interest, and the interest payment due on April 30, 2022, has been made and recorded. Date Account Titles and Explanation Debit Credit Apr. 30 enter an account title for the journal entry on April 30enter an account title for the journal entry on April 30
On August 1, 2022, Martinez Corp. issued $489,600, 6%, 10-year bonds at face value. Interest is payable annually on August 1. Martinez’s year-end is December 31. Prepare the journal entry to record the issuance of the bonds. Date Account Titles and Explanation Debit Credit Aug. 1 enter an account title to record the issuance of the bonds on August 1enter an account title to record the issuance of the bonds on August 1
Subject - account Please help me. Thankyou.

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