At the beginning of the current year, two bond issues (Simmons Industries 7%, 20-year bonds and Hunter Corporation 8%, 10-year bonds) were outstanding. During the year, the SimmonsIndustries bonds were redeemed and a significant loss on the redemption of bonds was reported on the income statement. At the end of the year, the Hunter bonds were reported as a noncurrentliability. The maturity date on the Hunter bonds was early in the following year.The Hunter Corporation bonds outstanding at the end of the current year should be reported as aIndustries bonds should be reported as anin the income statement.on the balance sheet and the loss on redemption of the Simmons

Bonds are the financial instruments issued by an entity to raise funds for a particular period of…

Answered: At the beginning of the current year,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On 31 December 20X7, a company has the following bond on the statement of financial position: Bond payable, 7%, interest due semi-annually on 31 Dec. and 30 June; maturity date, 30 June 20X11 Premium on bonds payable $5,600,000 47,040 $5,647,040
On January 1, 2021, QuantumQuarry Co. issued a 5-year bond with a face value of $500,000. The bond pays interest semi-annually on July 1 and January 1. At the time of issuance, the market rate was 8% for similar bonds. Quantum Quarry's fiscal year ends on December 31, and it uses the effective-interest method to amortize bond discount or premium. Related to this bond, Quantum Quarry's records show the following on December 31, 2021. Bond Payable, 10%, carrying amount Interest Payable $533,664 25,000 3. On January 1, 2023, immediately after paying interest to bondholders QuantumQuarry redeemed 20% of the outstanding bond at 102. Show how the presentation of this transaction would be reported on: a. Statement of cash flows b. Income statement c. Balance Sheet
On January 1, Bramble Corp. issued 10 year, S6,000,000, 9% bonds for $6,842,830. The market rate of interest for these bonds is 79%. Interest is payable annually on December 31 (note that these bonds are ANNUAL bonds). Bramble uses the effective-interest method of amortizing bond premium. At the end of the second year, Bramble should report unamortized bond premium of Group of answer choices $722.000 $716,556 5691,933 $319,093
On the first day of the fiscal year, a company issues an $334,000, 8%, five-year bond that pays semiannual interest of $13,360 ($334,000 x 8% x 1/2), receiving cash of $314,000. Journalize the entry to record the first interest payment and the amortization of the related bond discount using the straight-line method. If an amount box does not require an entry, leave it blank.
Zee Company sold an issue of $500,000, 9%, 10-year bonds for $468,845 on April 1. The interest is payable semiannually on October 1 and April 1. The market rate of interest at the time the bonds were issued was 10%. Oct. 1 Paid the first semiannual interest payment and amortized the bond discount, using the effective interest method. Dec. 31 Made the adjusting entry for bond interest accrued and amortization of the bond discount from October 1. (Hint: Use the effective interest rate for the three-month period from October 1–December 31.) Jan. 2 Reversed the adjusting entry for bond interest accrued and bond discount amortization as of December 31. Apr. 1 Paid the second semiannual interest payment and amortized the bond discount. Required: Prepare the general journal entry for above transactions (round all amounts to the nearest dollar).
. Dechow, Inc., issued $250,000 of 8%, 15-year bonds at 97 on July 1, 2009. Interest is payable semiannually on December 31 and June 30. Through June 30, 2016, Dechow amortized $3,186 of the bond discount. On July 1, 2016 Dechow retired the bonds at 101. Required a. Prepare journal entries to record the issue and retirement of these bonds. (Assume the June interest expense has already been recorded.) b. Post the journal entries from part a to their respective T-accounts. c. Record each of the transactions from part a in the financial statement effects template.
On January 1, Year 1, Maverick Company sold bonds that pay interest semiannually on June 30 and December 31. Maverick has a fiscal year - end of February 28. The amortization schedule for these bonds shows a cash payment of interest of $7, 200 and effective interest of $9, 009 relating to the interest payment that will be made on June 30, Year 1. What is the amount of interest expense that should be accrued by Maverick in an adjusting entry dated February 28, Year 1?
On January 1 of the current year, Barton Corporation issued 10%, 5-year bonds with a face value of $100,000. The bonds are sold for $95,000. The bonds pay interest semiannually on June 30 and December 31, and the maturity date is December 31, 5 years from now. Barton records straight-line amortization of the bond discount. The bond interest expense for the current year ended December 31 is a. $11,500 b. $5,000 c. $500 d. $11,000
On January 1 of the current year, Barton Corporation issued 7%, 5-year bonds with a face value of $87,000. The bonds are sold for $82,650. The bonds pay interest semiannually on June 30 and December 31, and the maturity date is December 31, 5 years from now. Barton records straight-line amortization of the bond discount. The bond interest expense for the current year ended December 31 is Oa. $435 Ob. $6,960 Oc. $3,045 Od. $7,395
On January 1, 2025, Concord Corporation issued $500,000 of 7% bonds, due in 10 years. The bonds were issued for $537.196, and pay interest each July 1 and January 1. The effective-interest rate is 6%. Prepare the company's journal entries for (a) the January 1 issuance. (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Concord uses the effective interest method. (Round answers to 0 decimal places, eg, 38,548. If no entry is required, select "No Entry for the account titles and enter O for the amounts Credit account titles are automatically indented when the amount is entered. Do not indent manually List all debit entries before credit entries) No. (4) Date Account Titles and Explanation Debit Cred
On January 1, Year 1, Victor Company issued bonds with a $750,000 face value, a stated rate of interest of 5%, and a 5-year term to maturity. The bonds sold at 96. Interest is payable in cash on December 31 of each year. Victor uses the straight-line method to amortize bond discounts and premiums. What is the amount of interest expense appearing on the income statement for the year ending December 31, Year 3? Multiple Choice O OOO $36,000 $43,500 $30,000 $37,500
Sheridan Corporation retires its $540000 face value bonds at 104 on January 1, following the payment of annual interest. The carrying value of the bonds at the redemption date is $560223. The entry to record the redemption will include a O debit of $1377 to Loss on Bond Redemption. O credit of $21627 to Premium on Bonds Payable. O debit of $21600 to Premium on Bonds Payable. O credit of $1377 to Loss on Bond Redemption.

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS