(a2) * Your answer is incorrect. Compute the total cost of borrowing for these bonds. Total cost of borrowing eTextbook and Media List of Accounts Save for Later $ 132,926 Attempts: 2 of 5 used Submit Answer

(a2) * Your answer is incorrect. Compute the total cost of borrowing for these bonds. Total cost of borrowing eTextbook and Media List of Accounts Save for Later $ 132,926 Attempts: 2 of 5 used Submit Answer

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 5EA: Diana Inc. issued $100,000 of its 9%, 5-year bonds for $96,149 when the market rate was 10%. The...

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Question

Wildhorse Co. issued $575,500 of 5-year, 5% bonds at 98 on January 1, 2020. The bonds pay interest annually.

3
(a2)
X Your answer is incorrect.
Compute the total cost of borrowing for these bonds.
Total cost of borrowing
eTextbook and Media
List of Accounts
Save for Later
+A
132,926
Attempts: 2 of 5 used
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Step 1: Introduce to bonds

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Step 2: Working for discount on bonds payable

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Step 3: Working for interest paid over the life of bond

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Step 4: Working for total cost of borrowing

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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?
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?
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Diana Inc. issued $100,000 of its 9%, 5-year bonds for $96,149 when the market rate was 10%. The bonds pay interest semi-annually. Prepare an amortization table for the first three payments.