Blossom Ltd. issued $0.96 million of 5-year, 4% bonds dated May 1, 2024, for $1,004,266 when the market interest rate was 3%. Interest is paid semi-annually on May 1 and November 1. Prepare an amortization schedule for the first three interest payments. (Round answers to O decimal places, e.g. 5,275.) Date May 1, 2024 BLOSSOM LTD. Bond Premium Amortization Table Effective Interest Method-Semi-Annual Interest Payments 4% Bonds Issued at market rate of 3% Interest Expense Interest Payment Premium Amortization $ Bond Carrying Amou

Blossom Ltd. issued $0.96 million of 5-year, 4% bonds dated May 1, 2024, for $1,004,266 when the market interest rate was 3%. Interest is paid semi-annually on May 1 and November 1. Prepare an amortization schedule for the first three interest payments. (Round answers to O decimal places, e.g. 5,275.) Date May 1, 2024 BLOSSOM LTD. Bond Premium Amortization Table Effective Interest Method-Semi-Annual Interest Payments 4% Bonds Issued at market rate of 3% Interest Expense Interest Payment Premium Amortization $ Bond Carrying Amou

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 7MCQ

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Wilbury Corporation issued 1 million of 13.5% bonds for 985,071.68. The bonds are dated and issued October 1, 2019, are due September 30, 2020, and pay interest semiannually on March 31 and September 30. Assume an effective yield rate of 14%. Required: 1. Prepare a bond interest expense and discount amortization schedule using the straight-line method. 2. Prepare a bond interest expense and discount amortization schedule using the effective interest method. 3. Prepare adjusting entries for the end of the fiscal year December 31, 2019, using the: a. straight-line method of amortization b. effective interest method of amortization 4. If income before interest and income taxes of 30% in 2020 is 500,000, compute net income under each alternative. 5. Assume the company retired the bonds on June 30, 2020, at 98 plus accrued interest. Prepare the journal entries to record the bond retirement using the: a. straight line method of amortization b. effective interest method of amortization 6. Compute the companys times interest earned (pretax operating income divided by interest expense) for 2020 under each alternative.
Aggies Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018, and received $540,000. Interest is payable semi-annually. The premium is amortized using the straight-line method. Prepare journal entries for the following transactions. 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
Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $540,000. Interest is payable annually. The premium is amortized using the straightline method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. June 30, 2019: entry to record payment of interest to bondholders C. June 30, 2019: entry to record amortization of premium D. June 30, 2020: entry to record payment of interest to bondholders E. June 30, 2020: entry to record amortization of premium
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Current Attempt in Progress Pharoah Company issued $309.000, 9%, 15-year bonds on December 31, 2024, for $296,640. Interest is payable annually on December 31. Pharoah uses the straight-line method to amortize bond premium or discount. Prepare the journal entries to record the following events. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) (a) (b) (c) No. (a) The issuance of the bonds: The payment of interest and the discount amortization on December 31, 2025. The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. Date Account Titles and Explanation Debit Cred
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What gain or loss, if any, would X2 record in this date?
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Determining the present value of bonds payable and journalizing using the effective-interest amortization method Ari Goldstein issued $300,000 of 11%, five-year bonds payable on January 1, 2018. The market interest rate at the date of issuance was 10%, and the bonds pay interest semiannually. Requirements How much cash did the company receive upon issuance of the bonds payable? (Round to the nearest dollar.) Prepare an amortization table for the bond using the effective-interest method, through the first two interest payments. (Round to the nearest dollar.) Journalize the issuance of the bonds on January 1, 2018, and the first second payments of the semiannual interest amount and amortization of the bonds on June 30, 2018, and December 31, 2018. Explanations are not required.