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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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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- An investment in bonds with a book value of $125,700 is sold for $132,000. The gain or loss on the sale of the bond investments is: A. loss of $6,300 B. gain of $6,300 C. loss of $125,700 D. gain of $132,000Provide best AnswerCompute 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…
- 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1. 2a. Journalize the entry to record the first semiannual interest payment on December 31, 20Y1, and the amortization of the bond premium, using the straight-line method.Compute the price of $42,601,480 received for the bonds by using the present value tablesStarmount Inc. sold bonds with a $50,000 face value, 12% interest, and 10-year term at $48,000. What is the total amount of interest expense over the life of the bonds?Provide answer the general accounting question
- Assume bonds payable are amortized using the straight-line amortization method unless stated otherwise. Determining the present value of bonds payable Interest rates determine the present value of future amounts. (Round to the nearest dollar.) Requirements Determine the present value of 10-year bonds payable with face value of $86,000 and stated interest rate of 14%, paid semiannually. The market rate of interest is 14% at issuance. Same bonds payable as in Requirement 1, but the market interest rate is 16%. Same bonds payable as in Requirement 1, but the market interest rate is 12%.Wildhorse Company purchased bonds with a face amount of $1225000 between interest payment dates. Wildhorse purchased the bonds at 101, paid brokerage costs of $15900, and paid accrued interest for three months of $25900. The amount to record as the cost of this long-term investment in bonds is $1253150. $1237250. $1225000. $1279050.On the day Federer Ltd redeemed its $1,000,000 face value bonds at 98, their carrying value was $1,200,000. Prepare a residual analysis for the bond redemption. Prepare the journal entry for the bond redemption. If you recognise a gain or loss, state where in the Statement of Comprehensive Income the gain or loss should appear
- From page 9-2 of the VLN, how do you determine the annuity cash flow (the bond interest payment) from an annual bond? Group of answer choices A. Bond payable x stated rate B. Bond liability x stated rate C. Bond payable x market rate D. Bond liability x market rateRequired Compute the cash proceeds from bond issues under the following terms. For each case, indicate whether the bonds sold at a premium or discount. (Round your answers to nearest dollar amount.) Cash Discount or Proceeds Premium а. Pear, Inc. issued $168,000 of 10-year, 8 percent bonds at 102. b. Apple, Inc. issued $139,000 of five-year, 12 percent bonds at 97. С. Cherry Co. issued $159,000 of five-year, 6 percent bonds at 102 1/4. d. Grape, Inc. issued $70,000 of four-year, 8 percent bonds at 98.00.Pedro Co purchased a bond investment in Juan Company. The following are the data pertaining to Pedro’s Investments in Debt Security. Date of purchase: January 1, 2021 Purchase price: P4,200,000 Principal amount: P4,000,000 Cash interest: 5% per annum, payable on December 31 Effective interest: 3.8806% per annum Maturity date: December 31, 2025 Fair value of the bond: December 31, 2021 P4,894,000 December 31, 2022 P4,560,000 The bond was sold on December 31, 2022 at its fair value. If the bonds are held for collection of contractual cash flow and for sale of financial asset, what amount is the carrying value of Investment in 2022? a. 4,200,000 b. 4,124,536 c. 3,800,000 d. 4,560,000