**Amortization Schedule - Bonds**Wang Corporation issued $100,000 in 5-year bonds on January 1, 2020. The bonds pay interest annually and have a stated rate of 6%. The market rate on the day of issue was also 6%.**Required**1. **Determine the issue price (PV) of the bond.** - N (period of time) - I (Interest) - PV (Present Value) - FV (Future Value) - PMT (Annuity)2. **Prepare the bond amortization schedule using the effective interest method.** | Year | Cash Interest Payment | Interest Expense | Carrying Value | |---------------|-----------------------|------------------|----------------| | Jan 1, 2020 | | | | | Dec 31, 2020 | | | | | Dec 31, 2021 | | | | | Dec 31, 2022 | | | | | Dec 31, 2023 | | | | | Dec 31, 2024 | | | |3. **Record the necessary journal entry at the date of issue and first interest payment.** **General Journal** | DR | CR | |----|----| | | |4. **Analyze the effect on the financial statements of the journal entry at date of issue (a) and the first interest payment (b).** | Assets = | Liabilities + | Equity | Revenues - | Expenses = | Net Income | |----------|---------------|--------|------------|------------|------------| | | | | | | |

Amortization Schedule - Bonds Wang Corporation issued $100,000 5 year bonds January 1, 2020. The bonds pay interest annually and have a stated rate of 6%. The market on day of issue was 6%. Required 1 Determine the issue price (PV) of the bond. N (period of time) I (Interest) PV (Present Value FV (Future Value) PMT (Annuity) 2 Prepare the bond amortization schedule using the effective interest method. Cash Interest Interest Year Carrying Value Page 1 Payment Expense Jan 1, 2020 Dec 31, 2020 Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Dec 31, 2024 3 Record the necessary journal entry at date of issue and first interest payment. General Journal DR CR 4 Analyze the effect on the financial statements of the journal entry at date of issue (a) and the first interest payment (b). Assets = Liabilities + Equity Revenues - Expenses = Net Income

Amortization Schedule - Bonds Wang Corporation issued $100,000 5 year bonds January 1, 2020. The bonds pay interest annually and have a stated rate of 6%. The market on day of issue was 6%. Required 1 Determine the issue price (PV) of the bond. N (period of time) I (Interest) PV (Present Value FV (Future Value) PMT (Annuity) 2 Prepare the bond amortization schedule using the effective interest method. Cash Interest Interest Year Carrying Value Page 1 Payment Expense Jan 1, 2020 Dec 31, 2020 Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Dec 31, 2024 3 Record the necessary journal entry at date of issue and first interest payment. General Journal DR CR 4 Analyze the effect on the financial statements of the journal entry at date of issue (a) and the first interest payment (b). Assets = Liabilities + Equity Revenues - Expenses = Net Income

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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Question 7: Messi issues $3,400,000 of 10%, 10-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,010,000. a. Prepare the January 1 journal entry to record the bonds' issuance. For each semiannual period, compute (a) the cash payment, (6) the straight-line discount amortization, and (c) the bond interest expense. b. Determine the total bond interest expense to be recognized over the bonds' life. C. Prepare the first two years of a straight-line amortization table. d. Prepare the journal entries to record the first two interest payments.
please answer in text not image with all working thanks in advance Robert Company issued 1,200 $1000 face value bonds on January 1, 2018. The bonds have a stated rate of 9%, mature on December 31, 2027, and pay interest on June 30 and December 31 of each year. The bonds were issued at a price of $1,281,542 when the market rate of interest was 8%. • Build and present the the complete amortization table • Determine the interest expense Robert should recognize for 2018
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Ace Company purchased 10,000 bonds issued by Jack Company in 2018 for $63 per bond and classified the investment as securities available-for-sale. The value of the Jack investment was $81 per bond on December 31, 2019, and $110 per bond on December 31, 2020. During 2021, Ace sold all of its Jack investment at $145 per bond. In its 2021 income statement, Ace would report: Multiple Choice A gain of $350,000. A gain of $470,000. A gain of $1,290,000. A gain of $820,000.
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Aggies Inc. issued bonds with a $450,000 face value, 8% interest rate, and a 4-year term on July 1, 2018, and received $510,000. Interest is payable semi-annually. The premium is amortized using the straight-line method. 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 Prepare journal entries for the above transactions. If an amount box does not require an entry, leave it blank. A. 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 B. fill in the blank 11 fill in the blank 12 fill in the blank 14 fill in the blank 15 C.
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