CCC Corp. had the following long-term debt at December 31: Collateral trust bonds, having securities of unrelated corporations as security Bonds unsecured as to principal P250,000 150,000 The debenture bonds amounted to
Q: ABC Corporation is authorized to issue $500,000 of 6 percent, 10-year bonds dated July 1, 2003, with…
A: 16) Premium on bonds = Proceeds from issuance of bonds - Value of bonds with interest Interest…
Q: What is the Bond Interest Expense on the Income Statement on December 31?
A: As the market rate is more than the quoted rate of the bond the 1st bond is issued at discount. As…
Q: A corporation issues $26,000,000 of 9% bonds to yield interest at the rate of 7%. (a) Was the amount…
A: the amount related to the bond issue : 1) Face amount is $26,000,000
Q: At December 31, Hull Corp. had the following debt securities that were purchased during the year,…
A: Held-for-trading securities: These are securities that the company intends to sell in the near…
Q: d) In the long-term debt structure of Sarah's Pies Inc., the following three bonds were reported:…
A: Bonds are fixed-income instruments that resemble loans given to borrowers by investors. The borrower…
Q: On January 1, 2020, ABC Company issued 5,000 of its 12%, P1,000 face value bonds for P5,350,000…
A: Accrued Interest on Bond: Accrued interest is the amount of interest earned on a debt(Bond) which is…
Q: 4. A corporation issues $26,000,000 of 9% bonds to yield interest at the rate of 7%. (a) Was the…
A: >Bonds Payable are the source of finance for the companies. >The bondholders are…
Q: Bonds Payable has a balance of $1,137,000 and Discount on Bonds Payable has a balance of $13,644. If…
A: Bonds: Bonds is a long-term liability of a company where it has to repay the principal amount along…
Q: On July 1, Year 1, ABC Corp purchased 6.00% bonds having a maturity value of $100,000 for $105,079.…
A: Correct option is a. $142 Unrealized gain or loss recorded under OCI under December 31 year 1 is…
Q: How much gain or (loss) should be recognized on the sale of Orange bonds? 2. How much unrealized…
A: Bond The purpose of issuing the bond is to generate the income to issue the debit which are utilized…
Q: 12. On 1/1/21, AB Company sold $100,000, 10%, 10 year bonds at 96. Complete the entries for the bond…
A: Bonds are considered a financial instrument used to raise finance for the organization. It is also…
Q: On January 1, Oriole Corporation issued $4100000, 14%, 5-year bonds with interest payable on…
A: The bonds payable are the long-term liabilities of the business. The bonds are issued at premium…
Q: Lion Corp issued a 10%, $400,000, 8-year bonds at 104. The entry to record the issuance of the bonds…
A: Journal Entry :— It is an act of recording transaction in books of account when transaction…
Q: McNeil Corporation issued $660,000 of 7% 10-year bonds. The bonds are dated and sold on January…
A: While using Effective Interest Method we recognize interest expenses on the basis of effective…
Q: True or false. Corporate bonds are short-term debt usually issued in of $1,000 increments.
A: Introduction: Short term Debt: The debt to be repaid within twelve months time period called as…
Q: Bonds Payable has a balance of $1,200,000 and Premium on Bonds Payable has a balance of $18,750. If…
A:
Q: Bonds Payable has a balance of $908,000 and Premium on Bonds Payable has a balance of $9,988. If the…
A: Introduction: Bonds payable are recorded when a company issues bonds to make income. Because it is a…
Q: A company received cash proceeds of 206,948 on a bond issue with a par value of 200,000. the…
A: Accounting's goals include keeping a systematic record of all financial transactions in a book of…
Q: McCoy Corporation issued $460,000 of 7% 10-year bonds. The bonds are dated and sold on January 1,…
A: The carrying amount, also known as the carrying value, is the asset's cost less accrued…
Q: Bonds Payable has a balance of $880,000 and Premium on Bonds Payable has a balance of $9,680. If the…
A: Amount paid on redemption = Face value of bonds x redemption price /100 = $880,000 x 102/100 =…
Q: Bonds Payable has a balance of $867,000 and Premium on Bonds Payable has a balance of $9,537. If the…
A: Assumed Bonds has a face value = 100 Bonds Payable has a balance = 867000 Number of Bonds =…
Q: what amount should RED initially record its investment in Orange Company? 2. At what amount should…
A: Answer 1) Orange Company: 2,000 Bonds x P1,000 2,000,000 x 92%…
Q: Melon Company issues $1,200,000 of its 15%, 10-year bonds at 95 on February 28, Year 1. The bonds…
A: The bonds payable are reported as long-term liabilities in the balance sheet. The bonds payable are…
Q: balance of $1,000,000 and Discount on Bonds Payable has a balance of $10,000. If the issuing…
A: Answer : Bonds payable balance = $1,000,000 Discount on bonds payable = $10,000
Q: On January 1, $904,000, 5-year, 10% bonds, were issued for $876,880. Interest is paid semiannually…
A: SOLUTION- Semiannual Amortization Amount= 904000 * 10% * 6/12= 45200
Q: Metro Company purchased $500,000, 10%, 5-year bonds on January 1, 20x1, with interest payable on…
A: Bonds are the financial instruments that are used by an entity to borrow funds from the financial…
Q: Bonds Payable has a balance of $962,000 and Premium on Bonds Payable has a balance of $10,582. If…
A: A bond is basically an interest-bearing loan instrument that is issued by the companies in order to…
Q: A company issued 432 $1,000 bonds at 116, and each bond was issued with one detachabl
A: Solution Market value of bond= 432 * $1000 * 1.04= 449280 Issue price = 432 * $1000 * 1.16=…
Q: Bonds Payable has a balance of $951,000 and Discount on Bonds Payable has a balance of $11,412. If…
A: Introduction:- The following basic information as follows under:- Bonds Payable has a balance of…
Q: 15. ABC Company Issues $100,000 of 30 year 5% bonds at 102. What entry is used to record this…
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Bonds Payable has a balance of $896,000 and Premium on Bonds Payable has a balance of $9,856. If the…
A: Redemption of Bonds: The process of repaying the sale amount of bonds to bondholders at the time of…
Q: On January 1, 2024, Baddour, Incorporated, issued 10%, 12-year bonds with a face amount of $162…
A: Bonds are bearer financial instruments with fixed interest that businesses issue to raise capital.…
Q: Bonds Pavable has a balance of $1.184.000 and Discount on Bonds Payable has a balance of $11.840. If…
A: Let’s assume the par value is $100 Total number of bonds issued would be : $11,84,000 / $100 i.e…
Q: A corporation sold $500,000, 5-year, 6% bonds on January 1 for $465,000. Interest is to be pai…
A: The bonds are issued to raise the money from the market or investors. The bonds are issued at…
Q: 27. A company holds $150,000 par value of bonds with a carrying value of $147,950. The company calls…
A: Bonds are high-security instruments for debt that help organizations raise money and meet their…
Q: Maxwell Manufacturing issued $480,000, 12-year, 8% bonds at 107, paying semiannual interest. What is…
A: Given, Face value of bonds = $480,000 Coupon rate = 8% Issue price at 107 Number of periods = 12*2…
Q: > O On January 1, $853,000, 5-year, 10% bonds were issued for $827,410. Interest is paid…
A: Par value of bond = $853000 Issue price of bonds= $827410 Discount on bonds payable= $853000-$827410…
Q: A company received cash proceeds of $426,525 on a bond issue with a par value of $400,000. The…
A: Bond is a financial instrument issued by a company in order to raise funds. In exchange for funds,…
Q: onds have face a at P1,800,000. TH ebts instruments atly, warrants wer
A: Journal entry: Journal entry is the book of original entry where first transactions are recorded in…
Q: On January 1, $853,000, 5-year, 10% bonds were issued for $827,410. Interest is paid semiannually on…
A: The bonds are issued at discount when market rate is higher than the coupon rate of bonds payable.…
Q: The following information relates to the debt securities investments of Cheyenne Company. 1. 2. 3.…
A: Journal Entry is the primary step to record the transaction in the books of accounts. Under Accrual…
Q: Conor Corporation has $10,500,000 of 5 percent, 10-year bonds dated January 1, with interest payment…
A: The bonds are issued to raise money from the investors or market for financial requirements of…
Q: On 3/1/21, Lansing Company sold 6.5% bonds having a maturity value of $800,000 at a price which…
A: A bond issue requires multiple stages to be accounted for. An outline of the procedure is given…
Q: Shurwood Ltd. issued 5,130,000 6%, 10-year, nonconvertible bonds with detachable warrants for…
A: Journal entries refer to the entries which are made at the end of the period or year and it records…
Q: 10. Float Corporation had the following transactions pertaining to debt investments. Jan. 1…
A: The journal entries are prepared to keep the record of day to day transactions of the business.
Step by step
Solved in 3 steps
- Collaborative Learning -KKI Chocolato Co is a supplier chocolate for Orangtua Corporation. It has had two exceptionally good years and has elected to invest its excess funds in bonds and equity. The following selected transactions relate to bonds and equity acquired as an investment by Chocolato, whose fiscal year ends on December 31. 2020 01-Feb Purchased 5,000 shares of the 100,000 shares no par common shares of Pineapple Co. for $52,500. The investment was classified as Trading 01-Apr Purchased 800, @ $1,000 Ginger Co. 10% bonds at face value plus accrued interest . Interest paid every 1st January. The investment was classified as Trading. 30-Apr Purchased 1.000 shares of the 100,000 shares outstanding $10 par ordinary shares of Mint Corporation for $6,200. The investment was classified as Trading 01-Nov Received a cash dividend of $2 per share on the Mint Corporation stock 20-Dec Pineapple Co announced to pay dividend for shareholder $1 per share, and will paid Jan 10, 2021.…On June 1, 20x1, ABC Co acquired investment in bonds with detachable warrants for P1,950,000. The bonds have face amount of P2,000,000. Without the detachable warrants, the bonds are selling at P1,800,000. The warrants have fair value of P150,000. ABC Co business model requires debts instruments to be measured at FVOCI and Equity instruments at fair value. Subsequently, warrants were sold for P120,000. Requirement: Prepare Journal Entries on June 1 and selling of warrants.1. Computational. On January 1, 20x1, ABC purchased bonds with face amount of P5,000,000. The entity paid P4,700,000 plus transaction cost of P42,130 for the bond investment. The business model of the entity in managing the financial asset is to collect contractual cash flows that are solely payment of principal and interest and also to sell the bonds the open market. The bonds mature on December 31, 20x3 and pays 6% interest annually on December 31 each year with 8% effective interest rate (after incorporating the transaction cost on initial recognition). The bonds are quoted at 106 and 108 on December 31, 20x1 and December 31, 20x2. The bonds are sold at 103 on July 1, 20x3, excluding accrued interest. Use 4-decimal present value factor. For the year ended December 31, 20x3, how much is the total impact to profit or loss as a result of the business model of ABC in holding this investment? (sample answer: 2,350,450.55)
- Accounting Bonds Payable has a balance of $957,000 and Discount on Bonds Payable has a balance of $9,570. If the issuing corporation redeems the bonds at 97.5, what is the amount of gain or loss on redemption? a. $14,355 loss b. $9,570 gain c. $14,355 gain d. $9,570 loss1. How much is the purchase price of the bonds? 2. Assuming that the nominal interest is 11% and the bonds were acquired to yield 13%, how much is the purchase price of the bonds? 3. Assume that the interest is payable every June 30 and December 31, how much is the purchase price of the bonds?5. On December 31, 2018, the balance sheet of Alphabet Corporation reported bonds outstanding with a face value of $6,000,000 and a related unamortized premium of $180,000. Interest is payable semiannually on January 1 and July 1. Prepare an entry in journal form without explanation on January 1, 2018, to record the conversion of bonds with a face value of $2,400,000 into common stock. Each $1,000 bond is convertible into 30 shares of $20 par value common stock. (6]
- I. Metro Company purchased $500,000, 10%, 5-year bonds on January 1, 20x1, with interest payable on July 1 and January 1. The market interest rate (yield) was 8% for bonds of similar risk and maturity. The market value on December 31, 20x1 was $555,000 and all bonds were sold for $507,500 on January 1, 20x2 after the second payment. Required: compute the bond price on January 1, 20x1, prepare the amortization schedule and record journal entries on January 1, 20x1, July 1, 20x1, December 31, 20x1 and January 1, 20x2 assuming the bond investment is classified as available-for-sale security.On January 1, $834,000, 5-year, 10% bonds, were issued for $808,980. Interest is paid semiannually on January 1 and July 1. If the issuing corporation uses the straight-line method to amortize discount on bonds payable, what is the semiannual amortization amount? Select the correct answer. $5,004 $2,502 $41,700 O $25,020On January 1, $954,000, 5-year, 10% bonds, were issued for $925,380. Interest is paid semiannually on January 1 and July 1. If the issuing corporation uses the straight-line method to amortize discount on bonds payable, what is the semiannual amortization amount? Select the correct answer. $47,700 $5,724 $28,620 $2,862
- Crane Limited had $2.39 million of bonds payable outstanding and the unamortized premium for these bonds amounted to $44,600. Each $1,000 bond was convertible into 20 preferred shares. All bonds were then converted into preferred shares. The Contributed Surplus - Conversion Rights account had a balance of $21,500. Assume that the company follows IFRS. a. Assuming that the book value method was used, what entry would be made? Account Titles and Explanation Debit Credit b. Assume that Crane Ltd. offers $9,000 to induce early conversion. What journal entry would be made? Account Titles and Explanation Debit Credit3. What is the equity component arising from the issuance of bonds payable? A. 450,000 B. 500,000 C. 620,000 D. 0 E. None of the aboveShurwood Ltd. issued 5,200,000 11%, 10-year, nonconvertible bonds with detachable warrants for $5,340,000. Shortly after issuance, the warrants trade for $314,000 in total, and the bonds were trading at 89, or $5,150,000, ex-warrants (i.e., without warrants attached). Required: 1. Provide the journal entry to record the transactions. 2. Provide the journal entry to record the first payment of interest on the convertible bond assuming that the bonds pay interest annually. Effective interest rate is 11.55%