**Bond Issuance Accounting Entry****Bond Information:**On January 1, 2020, Teal Company sold 11% bonds with a maturity value of $500,000 for $518,953. This provides bondholders with a 10% yield. The bonds are dated January 1, 2020, and mature on January 1, 2025, with interest payable on December 31 of each year. Teal Company allocates interest and any unamortized discount or premium on the effective-interest basis.**Required Journal Entry:**- **Date:** January 1, 2020- **Task:** Prepare the journal entry at the date of the bond issuance.**Instructions:**1. **Round answers to 0 decimal places** (e.g., 38,548).2. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.3. Credit account titles are automatically indented when an amount is entered. Do not indent manually.**Journal Entry Table Structure:**| Date | Account Titles and Explanation | Debit | Credit ||---------------|--------------------------------|-------|--------|| January 1, 2020 | | | || | | | || | | | |**Features:**- **eTextbook and Media:** Resource available for further reference.- **Save for Later:** Option to save the progress.- **Unlimited Attempts:** The user can attempt the exercise multiple times.- **Submit Answer Button:** For final submission after completion.This table helps organize and prepare financial entries effectively, ensuring compliance with accounting standards.

Journal Entry: Journal entry is the act of keeping records of transactions in an accounting journal.…

Answered: Current Attempt in Progress On January…

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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On January 1, 2020, Riverbed Company purchased 12% bonds, having a maturity value of $ 284,000 for $ 305,531.40. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Riverbed Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows. 2020 $ 303,400 2023 $ 293,200 2021 $ 292,200 2024 $ 284,000 2022 $ 291,200 (a) Prepare the journal entry at the date of the bond purchase. (b) Prepare the journal entries to record the interest revenue and recognition of fair value for 2020. (c) Prepare the journal entry to record the recognition of fair value for 2021. (Round answers to 2 decimal places, e.g. 2,525.25. Credit account titles are automatically indented when…
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On January 1, 2020, Swifty Company sold 12% bonds having a maturity value of $450.000 for $484,117. which provides the bondholders with a 10% yield. The bonds are dated January 1,2020, and mature January 1.2025, with interest payable December 31 of each year. Swifty Company allocates interest and unamortized discount or premium on the effective-interest basis, (a) Your answer is correct. Prepare the journal entry at the date of the bond issuance. (Round answer to O decimal places, eg 38,548. If no entry is required, select "No Entry for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually) Date Account Titles and Explanation Debit Credit January 1. 2020 Cash 484117 Bonds Payable 450000 Premium on Bonds Payable 34117 Attempts. 2 of3 used (b) Prepare a schedule of interest expense and bond amortization for 2020-2022. Round answer to O decimal places, e 3854) Schedule of Interest Expense and Bond…
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On January 1, 2020, Wildhorse Company purchased 6% bonds, having a maturity value of $550,000 for $475,253. The bonds provide the bondholders with a 8% yield. They are dated January 1, 2020, and mature January 1, 2027, with interest paid on June 30 and December 31 of each year. Wildhorse Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows. 2020 $476,000 2023 2021 $471,000 2024 $466,000 2022 (a) Prepare the journal entry at the date of the bond purchase. (b) Prepare the journal entries to record the interest revenue and recognition of fair value for 2020. (c) Prepare the journal entry to record the recognition of fair value for 2021. (Round answers to 2 decimal places, eg. 2,525.25. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for…
Current Attempt in Progress On January 2, 2018, Crane Corporation, a small company that follows ASPE, issued $1.8 million of 10% bonds at 98 due on December 31, 2027. Legal and other costs of $180,000 were incurred in connection with the issue. Crane has a policy of capitalizing and amortizing the legal and other costs incurred by including them with the bond recorded at the date of issuance. Interest on the bonds is payable each December 31. The $180,000 of issuance costs are being deferred and amortized on a straight-line basis over the 10- year term of the bonds. The discount on the bonds is also being amortized on a straight-line basis over the 10 years. (The straight-line method is not materially different in its effect compared with the effective interest method.) The bonds are callable at 102 (that is, at 102% of their face amount), and on January 2, 2023, the company called a face amount of $1,000,000 of the bonds and retired them. (a) Ignoring income taxes, calculate the…
On March 1, 2021, JebaMac Company issued 7% term bonds with a face amount of P2,000,000 due March 1, 2025. Interest is payable semiannually on September 1 and March 1. On the date of issue, the effective interest rate is 6%. Round off PV factors to 4 decimals. Assuming the bonds were retired on June 30, 2021 at 102, inclusive of any accrued interest, what is the gain or (loss) on retirement of bonds?
Current Attempt in Progress On January 1, 2025, Indigo Company purchased 12% bonds having a maturity value of $275,000 for $295,849.07. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2025, and mature January 1, 2030, with interest received on January 1 of each year, Indigo Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows. 2025 $293,800 2028 $285,900 $284,800 2029 $275,000 2026 2027 (b) (c) $283,800 Prepare the journal entry at the date of the bond purchase. Prepare the journal entries to record the interest revenue and recognition of fair value for 2025. Prepare the journal entry to record the recognition of fair value for 2026.
On January 1, 2018, Rei Company obtained $4,000,000 of 12% face value bonds at $3,767,000 to be held financial assets at amortized cost with a 14% effective yield. Interest on bonds is payable annually on December 31 and bonds mature on January 1, 2022. The effective interest method of amortization is used. The quoted price of the bonds is as follows: December 31, 2018: 97 December 31, 2019: 98 June 30, 2020: 99.a. What amount will be recognized as income on the 2018 income statement?b. What amount will be the gain (loss) on sale assuming all the bonds were sold on June 30, 2020 at 99 plus accrued interest?c. How much is the carrying amount of investment on December 31, 2018?
On January 1, 2020, Kendall Co. purchased to hold to maturity, 1000, $1,000, 9% bonds for a price to yield an effective interest rate of 10% . Interest is paid semiannually on December 31 and June 30 and the bonds mature on December 31, 2023. What price did Kendall Company pay for this bond?
Subject: accounting
On June 30, 2020, Wayne's Company issued $4,000,000 face value of 13%, 20-year bonds at $4,300,920, a yield of 12%.Wayne uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31. #1. Set up a schedule of interest expense and premium/discount amortization under the effective-interest method. (Hint: The eff ective-interest rate must be computed.) (Please use excel & show all formulas)

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