Cole Inc. prepares the following effective interest amortization table for its bondspayable.InterestPaymentDateDec 31, 2021Dec 31, 2022Dec 31, 2023Dec 31, 2024Dec 31, 2025Dec 31, 2026Dec 31, 2027Dec 31, 2028Dec 31, 2029Dec 31, 2030CashPaymentAmount7%8%6%5%$840,000$840,000$840,000$840,000$840,000$840,000$840,000$840,000InterestExpenseDecreaseinDiscount Discount$911,169$71,169$916,151$76,151$921,481$81,481$927,185$87,185$933,288$93,288$939,818 $99,818$106,805$114,282$946,805$954,282$840,000$962,281 $122,281$840,000 $970,841 $130,841What is the bonds' annual MARKET RATE of interest?$912,133$835,982$754,501$667,316$574,028$474,210$367,404$253,123$130,841$0BookValue$13,087,867$13,164,018$13,245,499$13,332,684$13,425,972$13,525,790$13,632,596$13,746,877$13,869,159$14,000,000

Bonds are issued at their present value. The bonds serve as a financial resource that assists to…

Cole Inc. prepares the following effective interest amortization table for its bonds payable. Interest Payment Date Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Dec 31, 2024 Dec 31, 2025 Dec 31, 2026 Dec 31, 2027 Dec 31, 2028 Dec 31, 2029 Dec 31, 2030 Cash Payment Amount 7% 8% 6% 5% Interest Expense $840,000 $840,000 $840,000 $840,000 $840,000 $840,000 $840,000 $840,000 $840,000 $840,000 $970,841 Decrease in Discount $911,169 $71,169 $916,151 $76,151 $921,481 $81,481 $927,185 $87,185 $933,288 $93,288 $939,818 $99,818 $946,805 $954,282 $962,281 $122,281 $130,841 What is the bonds' annual MARKET RATE of interest? Discount $912,133 $835,982 $106,805 $367,404 $114,282 $253,123 $754,501 $667,316 $574,028 $474,210 $130,841 $0 Book Value $13,087,867 $13,164,018 $13,245,499 $13,332,684 $13,425,972 $13,525,790 $13,632,596 $13,746,877 $13,869,159 $14,000,000

Cole Inc. prepares the following effective interest amortization table for its bonds payable. Interest Payment Date Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Dec 31, 2024 Dec 31, 2025 Dec 31, 2026 Dec 31, 2027 Dec 31, 2028 Dec 31, 2029 Dec 31, 2030 Cash Payment Amount 7% 8% 6% 5% Interest Expense $840,000 $840,000 $840,000 $840,000 $840,000 $840,000 $840,000 $840,000 $840,000 $840,000 $970,841 Decrease in Discount $911,169 $71,169 $916,151 $76,151 $921,481 $81,481 $927,185 $87,185 $933,288 $93,288 $939,818 $99,818 $946,805 $954,282 $962,281 $122,281 $130,841 What is the bonds' annual MARKET RATE of interest? Discount $912,133 $835,982 $106,805 $367,404 $114,282 $253,123 $754,501 $667,316 $574,028 $474,210 $130,841 $0 Book Value $13,087,867 $13,164,018 $13,245,499 $13,332,684 $13,425,972 $13,525,790 $13,632,596 $13,746,877 $13,869,159 $14,000,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

of 6 Required information [The following information applies to the questions displayed below.] On January 1, 2024, Vacation Destinations issues $40 million of bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: (1) Date 1/1/2024 6/30/2024 12/31/2024 (2) Cash Paid for Interest $1,400,000 1,400,000 (3) Interest Expense Market annual interest rate $1,491,277 1,494, 928 Answer is complete but not entirely correct. 7X% Increase in Carrying Value $91,277 94,928 5. What is the market annual interest rate? (Round your answer to the nearest whole percent.) (5) Carrying Value < Prev $37,281,935 37,373,212 37,468, 140 8 9 of 23 ⠀ Next
Cagney Company sold $248,000 of bonds on January 1, 2024. A portion of the amortization table follows. Period CashPayment(Credit) InterestExpense(Debit) Discounton BondsPayable(Credit) Discounton BondsPayableBalance CarryingValue At issue $8,000 $240,000 06/30/24 $12,000 $12,800 $800 7,200 240,800 12/31/24 12,000 12,800 800 6,400 241,600 06/30/25 ? ? ? ? ? Required: 1. Determine the stated interest rate on these bonds. Round your answer to the nearest whole number.fill in the blank 1 % 2. Calculate the interest expense and the discount amortization for the interest period ending on June 30, 2025. Interest expense $fill in the blank 2 Discount amortization $fill in the blank 3 3. Calculate the liability balance shown on a balance sheet after the interest payment is recorded on June 30, 2025.$fill in the blank 4
A company issues $17000000, 9.8%, 20-year bonds to yield 10% on January 1, 2024. Interest is paid on June 30 and December 31. The proceeds from the bonds are $16708295.53. If the effective-interest method of amortization is used, what amount of interest expense will be recognized in 2024? $833000 $1670756 $1670951 $1666000
Recording Bond Entries and Preparing an Amortization Schedule-Debt Issuance Costs
KKK Inc. provided the following schedule of liabilities on December 31,2021: Accounts payable P6,500,000 Bank note payable – 10% 3,000,000 Bank note payable – 11% 5,000,000 Interest payable 150,000 Mortgage note payable – 10% 2,000,000 Bonds payable 4,000,000 --- The P3,000,000, 10% was issued March 1,2021, payable on demand. Interest is payable every six months. ---The one-year P5,000,000,11% note was issued January 15,2021. On December 31,2021, KKK negotiated written agreement with the bank to replace the note with a 2-year. P5,000,000 note to be issued January 15,2022. ---The 10% mortgage note was issued October 1,2018, with a term of 10 years. Terms of the note give the holder the right to demand immediate payment if the entity fails to make a monthly…
On January 1, 2021, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: Cash Effective Increase in Outstanding Payment Payment Interest Balance Balance 5,802,315 1 332,000 348,139 16,139 5,818,454 2 332,000 349,107 17,107 5,835,561 3 332,000 350,134 18,134…
Lexy Company issued P 10,000,000 of 10-year, 9% bonds on March 1, 2020 at 97 plus accrued interest. The bonds are dated January 1, 2020, and pay interest on June 30 and December 31. What is the total cash received on the issue date? *a. P 9,700,000b. P 10,225,000c. P 9,850,000d. P 9,550,000
ony Hawk's Adventure (THA) issued callable bonds on January 1, 2021. THA's accountant has projected the following amortization schedule from issuance until maturity: Date cash paid Interest Expense Increase in carrying value carrying value 01/01/2021 $218,690 06/30/2021 $11,500 $13,121 $1,621 220,311 12/31/2021 11,500 13,219 1,719 222,030 06/30/2022 11,500 13,322 1,822 223,852 12/31/2022 11,500 13,431 1,931 225,783 06/30/2023 11,500 13,547 2,047 227,830 12/31/2023 11,500 13,670 2,170 230,000 THA issued the bonds for: Multiple Choice $230,000. $218,690. $299,000. Cannot be determined from the given information.
Lopez Plastics Co. (LPC) issued callable bonds on January 1, 2021. LPC's accountant has projected the following amortizatic schedule from issuance until maturity: Cash Effective Decrease in Date Outstanding interest interest balance balance 1/1/2021 24 207,020 6/30/2021 2$ 7,000 $4 6,211 24 789 206,230 12/31/2021 7,000 6,187 813 205,417 6/30/2022 7,000 6,163 837 204,580 12/31/2022 7,000 6,137 863 203,717 6/30/2023 7,000 6,112 888 202,829 12/31/2023 7,000 6,085 915 201,913 943 200,971 6/30/2024 7,000 6,057 971 200,000 7,000 6,029 12/31/2024 LPC issued the bonds:
On January 1, 2024, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: Payment Cash Payment Effective Interest Increase in Balance Outstanding Balance 6,095,749 1 228,000 243,830 15,830 6,111,579 2 228,000 244,463 16,463 6,128,042 3 228,000 245,122 17,122 6,145,164 4 228,000 245,807 17,807 6,162,971 5 228,000 246,519 18,519 6,181,490 6 228,000 247,260 19,260 6,200,750 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 38 228,000 295,564 67,564 7,456,656 39 228,000 298,266 70,266 7,526,922 40 228,000 301,078 73,078 7,600,000 Required: What is the face amount of the bonds? What is the initial selling price of the bonds? What is the term to maturity in years? Interest is determined by what approach? What is the stated annual interest rate? What is the effective annual interest rate? What is the total cash interest paid over the term to maturity? What is the total effective interest…
how to calculate this? thank you
Presented below is an amortization schedule related to Flint Company's 5-year, $150,000 bond with a 7% interest rate and a 4% yield, purchased on December 31, 2023, for $170,034. Date Cash Received Interest Revenue Bond Premium Carrying Amount Amortization of Bonds 12/31/23 $170,034 12/31/24 $10,500 $6,801 $3,699 166,335 12/31/25 10,500 6,653 3,847 162,488 12/31/26 10,500 6,500 4,000 158,488 12/31/27 10,500 6,340 4,160 154,328 12/31/28 10,500 6,172 4,328 150,000 The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end. 12/31/24 12/31/25 12/31/26 12/31/27 12/31/28 Amortized cost $166,335 $162,488 $158,488 $154,328 $150,000 Fair value 165,800 164,700 160,400 155,400 150,000 (a) Prepare the journal entry to record the purchase of these bonds on December 31, 2023, assuming the bonds are classified as held-to-maturity securities. (b) Prepare the journal entry related to the held-to-maturity bonds for 2024. (c) Prepare the journal entry…