Annapolis Company purchased a $3,000, 6%, 6-year bond at 101 and held it to maturity. The straight-line method of amortization is used for both premiums and discounts. What is the net cash received over the life of the bond investment?
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What is the net cash received over the life of the bond investment?
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- Annapolis Company purchased a $3,000, 6%, 6-year bond at 101 and held it to maturity. The straight-line method of amortization is used for both premiums and discounts. What is the net cash received over the life of the bond investment?According to the theory, premium bonds, discount bonds, and face value bonds at the expiry date will have a value of $1,000. Why is the value is $1,000 at the expiring day? Explain.Presented below is the partial bond discount amortization schedule for Pharoah Corp. Pharoah uses the effective-interest method of amortization. Interest Periods Issue date 1 2 Interest to Be Paid $117,000 117,000 Interest Expense to Be Recorded $124,981 125,380 Discount Amortization $7,981 8,380 Unamortized Discount Debit $100,383 92,402 84,022 Bond Carrying Value Credit $2,499,617 2,507,598 (a) Prepare the journal entry to record the payment of interest and the discount amortization at the end of period 1. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation 2,515,978
- The following is the partial bond discount amortization schedule for Monty Corp. Monty uses the effective-interest method of amortization. Interest Periods Issue date (a) 1 2 Interest to Be Paid $42,750 42,750 Interest Expense to Be Recorded Account Titles and Explanation $45,666 45,812 Discount Amortization $2,916 3,062 Unamortized Discount Debit $36,678 33,762 30,700 Bond Carrying Value $913,322 Prepare the journal entry to record the payment of interest and the discount amortization at the end of period 1. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Credit 916,238 919,300Compute bond proceeds, amortizing premium by interest method, and interest expense DATA Face amount of bonds Contract rate of interest Term of bonds, years Market rate of interest Interest payment REQUIRED: a. Compute the amount of cash proceeds from the sale of the bonds. $41,000,000 11% 3 9% Semiannual b. Compute the amount of premium to be amortized for the first semiannual interest payment period, using the interest method. c. Compute the amount of premium to be amortized for the second semiannual interest payment period, using the interest method. d. Compute the amount of the bond interest expense for the first year. Using formulas and cell references from the problem data, perform the required analysis. Formulas entered in the green cells show in the orange cells. Transfer amounts to CNOWv2 for grading. a. PV of cash proceeds b. Premium amortized for the 1st interest payment period c. Premium amortized for the 2nd interest payment period d. Interest expense for the 1st year…Given that a bond's carrying value is $185,000 and the fair value is $183,000, what is the journal entry to record the unrealized holding gain? Would it be a debit or credit to unrealized holding gain? Likewise, if this was a loss, would it be debit or credit to unrealized holding loss? Thanks!
- If bonds of $1,000,000 with unamortized discount of $10,000 are redeemed at 98, the gain on redemption of bonds is $10,000. True FalseDengarDevin Company computes the following bond interest amortization table for bonds issued on January 1, 2021. Use the information on this table to answer the questions below. Interest Cash Payment Payment Interest Decrease in Вook Date Amount Discount Value Expense $441,068 $444,310 $447,683 $451,190 $454,838 $458,631 $462,577 $466,680 $470,947 $475,385 Discount $360,000 $360,000 $360,000 $360,000 $360,000 $360,000 $360,000 $360,000 $360,000 $360,000 $81,068 $84,310 $87,683 $91,190 $94,838 $98,631 $102,577 $106,680 $110,947 $115,385 $892,240 $807,929 $720,247 $629,056 $534,219 $435,587 $333,011 $226,331 $115,385 $0 $11,107,760 $11,192,071 $11,279,753 $11,370,944 $11,465,781 $11,564,413 $11,666,989 $11,773,669 $11,884,615 $12,000,000 June 30, 2021 Dec 31, 2021 June 30, 2022 Dec 31, 2022 June 30, 2023 Dec 31, 2023 June 30, 2024 Dec 31, 2024 June 30, 2025 Dec 31, 2025
- Please answer all three subparts..thankuPresented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale. 31.12.14 31.12.15 31.12.16Amortized Cost Tk. 491,150 519,442 550000Fair Value Tk. 497,000 509,000 550000Required:(a) Indicate whether the bonds were purchased at a discount or at a premium.(b) Prepare the adjusting entry to record the bonds at fair value at December 31, 2014. The Fair Value Adjustment account has a debit balance of Tk. 1,000 prior to adjustment.(c) Prepare the adjusting entry to record the bonds at fair value at December 31, 2016General Investment Co. (GIC) purchased bonds on January 1, 2021. GIC's accountant has projected the following amortization schedule from purchase until maturity: Date Cash Received Interest Revenue Amortization of Discount Amortized Cost 1/1/2021 $ 194,758 6/30/2021 $ 7,000 $ 7,790 $ 790 195,548 12/31/2021 7,000 7,822 822 196,370 6/30/2022 7,000 7,855 855 197,225 12/31/2022 7,000 7,889 889 198,114 6/30/2023 7,000 7,925 925 199,039 12/31/2023 7,000 7,961 961 200,000 1. At a discount. 2. At par. 3. Cannot be determined from the given information.…