!Required information[The following information applies to the questions displayed below.]Claire Corporation is planning to issue bonds with a face value of $160,000 and a coupon rate of 8 percent. The bondsmature in two years and pay interest quarterly every March 31, June 30, September 30, and December 31. All of the bondswere sold on January 1 of this year. Claire uses the effective-interest amortization method and also uses a discountaccount. Assume an annual market rate of interest of 12 percent.(FV of $1. PV of $1, FVA of $1, and PVA of $1)Note: Use appropriate factor(s) from the tables provided.Show Transcribed Text<Journal entry worksheetNote: Enter debits before credits.Record the issuance of the bonds on January 1.DateJanuary 01Record entryJGeneral JournalClear entrycDebitCreditView general journal Journal entry worksheet<1 2 3 4Record the interest payment on March 31.Note: Enter debits before credits.DateMarch 31Record entryShow Transcribed TextLong-term liabilitiesGeneral JournalClear entryCCLAIRE CORPORATIONBalance Sheet (Partial)At December 31ĊDebitCreditView general journal

Bonds payable refers to a type of long-term debt that a company or organization issues to borrow…

Answered: Claire Corporation is planning to issue…

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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NoleCo issues bonds on January 1, 20X1. The bonds mature ten years from this date and pay interest semi-annually on June 30 and December 31 each year. The face value of the bonds is $500,000 and the coupon/stated rate is 6%. The market rate on the issue date is 5%. The bonds were issued for $538,973 The carrying value of these bonds on December 31, 20X1 (after the interest payment on that date) is: $533,248 $536,591 $541,265 $500,000 $535,883
On January 1 of this year, Cunningham Corporation issued bonds with a face value of $200,000 and a coupon rate of 6 percent. The bonds mature in 10 years and pay interest annually every December 31. The total issue price of the bonds is $173,160. The company uses the effective-interest amortization method. Prepare all journal entries under this bond arrangement for the first year. In the journal entries, put bond discounts in separate accounts.
On January 1 of this year, Kona Corporation sold bonds with a face value of $1,520,000 and a coupon rate of 10 percent. The bonds mature in four years and pay interest semiannually every June 30 and December 31. Kona uses the straight-line amortization method and also uses a premium account. Assume an annual market rate of interest of 8 percent. Required: 1.&2. Prepare the journal entry to record the issuance of the bonds and the interest payment on June 30 of this year. 3. What bonds payable amount will Kona report on its June 30 balance sheet? \
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warded Denzel Corporation is planning to issue bonds with a face value of $630,000 and a coupon rate of 7.5 percent. The bonds mature in 4 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Denzel uses the effective-interest amortization method and also uses a discount account. Assume an annual market rate of interest of 8.5 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required: 1. and 2. Prepare the journal entries to record the issuance of the bonds and interest payment on June 30 of this year. 3. What bonds payable amount will Denzel report on its June 30 balance sheet?
Park Corporation is planning to issue bonds with a face value of $2,800,000 and a coupon rate of 7 percent. The bonds mature in 10 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Park uses the effective - interest amortization method and also uses a premium account. Assume an annual market rate of interest of 6.0 percent. (FV of $1, PV of S1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required: 1. and 2. Prepare the journal entry to record the issuance of the bonds and the interest payment on June 30 of this year 3. What bonds payable amount will Park report on its June 30 balance sheet?
Hartford Research issues bonds dated January 1 that pay interest semiannually on June 30 and December 31. The bonds have a $39,000 par value and an annual contract rate of 8%, and they mature in 10 years. (Table B.1, Table B.2, Table B.3, and Table B.4) Note: Use appropriate factor(s) from the tables provided. Round all table values to 4 decimal places, and use the rounded table values in calculations. Required: Consider each separate situation. 1. The market rate at the date of issuance is 6%. (a) Complete the below table to determine the bonds' issue price on January 1. (b) Prepare the journal entry to record their issuance. 2. The market rate at the date of issuance is 8%. (a) Complete the below table to determine the bonds' issue price on January 1. (b) Prepare the journal entry to record their issuance. 3. The market rate at the date of issuance is 10%. (a) Complete the below table to determine the bonds' issue price on January 1. (b) Prepare the journal entry to record their…
Metlock Inc. issues $4,200,000 of 7% bonds due in 10 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 12%. What amount will Metlock receive when it issues the bonds?
Paul Dirac & Associates begin operations on 1/1/X1 by issuing a 3.00 year term (Bullet) bond with a par value of $3,800,000. The bond pays interest semi annually. On the date of issuance, the annual coupon rate of the bond is 3.000% while the annual required rate of return in the debt capital markets (the discount rate) is 4.250%. Dirac assumes that he will earn $1,700,000 in cash revenues and incur cash operating expenses of 45.000% of revenues each 6 month period for the next 3.00 fiscal years. The corporate tax rate is assumed to be 21.00%. Questions 1) Create an amortization table for the Bond. 2) What is the Price of the bond? What is the Value of any discount or premium? 3) Provide all journal entries and T-accounts for this transaction over the next 3 years. 4) Based on the information in the problem, create semi-annual pro-forma financial statements (I/S, SRE, B/S) for Dirac & Associates for the next 3 years (6 Semi-annual periods).
Allen Roofing Materials has 6 percent bonds outstanding that are currently priced at $1,001 each. The bonds pay interest on December 1 and June 1. What is the dirty price of this bond if today's date is April 1? Assume a 360-day year.
The following information applies to the questions displayed below.] Serotta Corporation is planning to issue bonds with a face value of $300,000 and a coupon rate of 12 percent. The bonds mature in two years and pay interest quarterly every March 31, June 30, September 30, and December 31. All of the bonds were sold on January 1 of this year. Serotta uses the effective-interest amortization method and does not use a premium account. Assume an annual market rate of interest of 8 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided.
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