Bond Discount, Entries for Bonds Payable TransactionsOn July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $46,000,000 of 20-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $42,309,236. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.Required:For all journal entries, if an amount box does not require an entry, leave it blank. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.20Y1 July 11.Accounts PayableBonds PayableCashInterest ExpenseInterest PayablePremium on Bonds Payable2.Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest PayablePremium on Bonds Payable3.Bonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest PayablePremium on Bonds Payable Journalize the entries to record the following: The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar.20Y1 Dec. 311.Bonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest PayableNotes Payable2.Bonds PayableDiscount on Bonds PayableInterest ExpenseInterest PayableInterest RevenueNotes Payable3.Bonds PayableCashInterest ExpenseInterest PayableNotes PayablePremium on Bonds Payable The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar.20Y2 June 30.1.Bonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest PayablePremium on Bonds Payable2.Accounts PayableBonds PayableDiscount on Bonds PayableInterest ExpenseInterest PayablePremium on Bonds Payable3.Accounts PayableBonds PayableCashInterest ExpenseInterest PayablePremium on Bonds Payable Determine the total interest expense for 20Y1.Fill in the blank4. Will the bond proceeds always be less than the face amount of the bonds when the contract rateis less than the market rate of interest?1.YesNo Compute the price of $42,309,236 received for the bonds by using the present value tables in Appendix A. Round your PV values to 5 decimal places and the final answers to the nearest dollar. Your total may vary slightly from the price given due to rounding differences.Present value of the face amountFill in the blankPresent value of the semiannual interest paymentsFill in the blankPrice received for the bondsFill in the blank Bond Discount, Entries for Bonds Payable TransactionsOn July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $46,000,000 of 20-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $42,309,236. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.Required:For all journal entries, if an amount box does not require an entry, leave it blank.1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.20Y1 July 12. Journalize the entries to record the following:a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar.20Y1 Dec. 31b. The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar.20Y2 June 303. Determine the total interest expense for 20Y1.4. Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest?5. Compute the price of $42,309,236 received for the bonds by using the present value tables in Appendix A. Round your PV values to 5 decimal places and the final answers to the nearest dollar. Your total may vary slightly from the price given due to rounding differences.Present value of the face amountPresent value of the semiannual interest paymentsPrice received for the bonds

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Bond Discount, Entries for Bonds Payable Transactions On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $46,000,000 of 20-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $42,309,236. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1. 20Y1 July 1 1. Accounts Payable Bonds Payable Cash Interest Expense Interest Payable Premium on Bonds Payable 2. Accounts Payable Bonds Payable Discount on Bonds Payable Interest Expense Interest Payable Premium on Bonds Payable 3. Bonds Payable Cash Discount on Bonds Payable Interest Expense Interest Payable Premium on Bonds Payable Journalize the entries to record the following: The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar. 20Y1 Dec. 31 1. Bonds Payable Cash Discount on Bonds Payable Interest Expense Interest Payable Notes Payable 2. Bonds Payable Discount on Bonds Payable Interest Expense Interest Payable Interest Revenue Notes Payable 3. Bonds Payable Cash Interest Expense Interest Payable Notes Payable Premium on Bonds Payable The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar. 20Y2 June 30. 1. Bonds Payable Cash Discount on Bonds Payable Interest Expense Interest Payable Premium on Bonds Payable 2. Accounts Payable Bonds Payable Discount on Bonds Payable Interest Expense Interest Payable Premium on Bonds Payable 3. Accounts Payable Bonds Payable Cash Interest Expense Interest Payable Premium on Bonds Payable Determine the total interest expense for 20Y1. Fill in the blank 4.

Bond Discount, Entries for Bonds Payable Transactions On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $46,000,000 of 20-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $42,309,236. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1. 20Y1 July 1 1. Accounts Payable Bonds Payable Cash Interest Expense Interest Payable Premium on Bonds Payable 2. Accounts Payable Bonds Payable Discount on Bonds Payable Interest Expense Interest Payable Premium on Bonds Payable 3. Bonds Payable Cash Discount on Bonds Payable Interest Expense Interest Payable Premium on Bonds Payable Journalize the entries to record the following: The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar. 20Y1 Dec. 31 1. Bonds Payable Cash Discount on Bonds Payable Interest Expense Interest Payable Notes Payable 2. Bonds Payable Discount on Bonds Payable Interest Expense Interest Payable Interest Revenue Notes Payable 3. Bonds Payable Cash Interest Expense Interest Payable Notes Payable Premium on Bonds Payable The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar. 20Y2 June 30. 1. Bonds Payable Cash Discount on Bonds Payable Interest Expense Interest Payable Premium on Bonds Payable 2. Accounts Payable Bonds Payable Discount on Bonds Payable Interest Expense Interest Payable Premium on Bonds Payable 3. Accounts Payable Bonds Payable Cash Interest Expense Interest Payable Premium on Bonds Payable Determine the total interest expense for 20Y1. Fill in the blank 4.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Bond Discount, Entries for Bonds Payable Transactions

On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $46,000,000 of 20-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $42,309,236. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.

Required:

For all journal entries, if an amount box does not require an entry, leave it blank.

Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.

20Y1 July 1

Accounts Payable
Bonds Payable
Cash
Interest Expense
Interest Payable
Premium on Bonds Payable

Accounts Payable
Bonds Payable
Discount on Bonds Payable
Interest Expense
Interest Payable
Premium on Bonds Payable

Bonds Payable
Cash
Discount on Bonds Payable
Interest Expense
Interest Payable
Premium on Bonds Payable
Journalize the entries to record the following:
The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar.

20Y1 Dec. 31

Bonds Payable
Cash
Discount on Bonds Payable
Interest Expense
Interest Payable
Notes Payable

Bonds Payable
Discount on Bonds Payable
Interest Expense
Interest Payable
Interest Revenue
Notes Payable

Bonds Payable
Cash
Interest Expense
Interest Payable
Notes Payable
Premium on Bonds Payable

The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar.

20Y2 June 30.

Bonds Payable
Cash
Discount on Bonds Payable
Interest Expense
Interest Payable
Premium on Bonds Payable

Accounts Payable
Bonds Payable
Discount on Bonds Payable
Interest Expense
Interest Payable
Premium on Bonds Payable

Accounts Payable
Bonds Payable
Cash
Interest Expense
Interest Payable
Premium on Bonds Payable
Determine the total interest expense for 20Y1.
Fill in the blank

Will the bond proceeds always be less than the face amount of the bonds when the contract rateis less than the market rate of interest?

Compute the price of $42,309,236 received for the bonds by using the present value tables in Appendix A. Round your PV values to 5 decimal places and the final answers to the nearest dollar. Your total may vary slightly from the price given due to rounding differences.

Present value of the face amount	Fill in the blank
Present value of the semiannual interest payments	Fill in the blank
Price received for the bonds	Fill in the blank

Bond Discount, Entries for Bonds Payable Transactions
On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $46,000,000 of 20-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $42,309,236. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Required:
For all journal entries, if an amount box does not require an entry, leave it blank.
1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.
20Y1 July 1
2. Journalize the entries to record the following:
a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar.
20Y1 Dec. 31
b. The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar.
20Y2 June 30
3. Determine the total interest expense for 20Y1.
4. Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest?
5. Compute the price of $42,309,236 received for the bonds by using the present value tables in Appendix A. Round your PV values to 5 decimal places and the final answers to the nearest dollar. Your total may vary slightly from the price given due to rounding differences.
Present value of the face amount
Present value of the semiannual interest payments
Price received for the bonds

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