Bond Premium, Entries for Bonds Payable TransactionsRodgers Corporation produces and sells football equipment. On July 1, 20Y1, Rodgers issued $65,000,000 of 10-year, 12% bonds at a market (effective) interest rate of 10%, receiving cash of $73,100,469. 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, 20Y1.1.Bonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest PayablePremium on Bonds Payable2.Accounts PayableCashDiscount on Bonds PayableInterest ExpenseInterest PayablePremium on Bonds Payable3.Accounts PayableBonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest Payable Journalize the entries to record the following: The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar.20Y1 Dec. 311.Bonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest PayableInterest Receivable2.Bonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest PayableInterest Receivable3.Bonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest PayablePremium on Bonds Payable The interest payment on June 30, 20Y2, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar.20Y2 June 301.Bonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest PayableInterest Receivable2.Accounts PayableBonds PayableCashDiscount on Bonds PayableInterest PayablePremium on Bonds Payable3.Bonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest PayablePremium on Bonds Payable Determine the total interest expense for 20Y1. Round to the nearest dollar. Will the bond proceeds always be greater than the face amount of the bonds when the contract rateis greater than the market rate of interest? Yes or No? Compute the price of $73,100,469 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.Present value of the face amount Present value of the semi-annual interest payments Price received for the bonds Bond Premium, Entries for Bonds Payable TransactionsRodgers Corporation produces and sells football equipment. On July 1, 20Y1, Rodgers issued $65,000,000 of 10-year, 12% bonds at a market (effective) interest rate of 10%, receiving cash of $73,100,469. 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 premium, 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 premium, using the straight-line method. Round to the nearest dollar.20Y2 June 303. Determine the total interest expense for 20Y1. Round to the nearest dollar.4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest?5. Compute the price of $73,100,469 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.Present value of the face amountPresent value of the semi-annual interest paymentsPrice received for the bonds

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Answered: Bond Premium, Entries for Bonds Payable…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Bond Premium, Entries for Bonds Payable Transactions

Rodgers Corporation produces and sells football equipment. On July 1, 20Y1, Rodgers issued $65,000,000 of 10-year, 12% bonds at a market (effective) interest rate of 10%, receiving cash of $73,100,469. 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.

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

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

Accounts Payable
Bonds Payable
Cash
Discount on Bonds Payable
Interest Expense
Interest Payable

Journalize the entries to record the following:
The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar.

20Y1 Dec. 31

Bonds Payable
Cash
Discount on Bonds Payable
Interest Expense
Interest Payable
Interest Receivable

Bonds Payable
Cash
Discount on Bonds Payable
Interest Expense
Interest Payable
Interest Receivable

Bonds Payable
Cash
Discount on Bonds Payable
Interest Expense
Interest Payable
Premium on Bonds Payable
The interest payment on June 30, 20Y2, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar.

20Y2 June 30

Bonds Payable
Cash
Discount on Bonds Payable
Interest Expense
Interest Payable
Interest Receivable

Accounts Payable
Bonds Payable
Cash
Discount on Bonds Payable
Interest Payable
Premium on Bonds Payable

Bonds Payable
Cash
Discount on Bonds Payable
Interest Expense
Interest Payable
Premium on Bonds Payable
Determine the total interest expense for 20Y1. Round to the nearest dollar.
Will the bond proceeds always be greater than the face amount of the bonds when the contract rateis greater than the market rate of interest? Yes or No?
Compute the price of $73,100,469 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.