Entries for TS: Effective Interest MethodOn July 1 of Year 1, West Company purchased for cash, 16, $10,000 bonds of North Corporation at a market rate of 6%. The bonds pay 5% interest, payable on a semiannual basis each July 1 and January 1, and mature in threeyears on July 1. The bonds are classified as trading securities. West Company's annual reporting period ends December 31. Assume the effective interest method of amortization of any discounts or premiums.Note: When answering the following questions, round answers to the nearest whole dollar.Amortization ScheduleJournal Entries in Year 1Journal Entries in Year 2d. Record the receipt of interest on January 1 of Year 2.DateJan. 1, Year 2Account NameDr.Cr.00 %00 ×To record the receipt of interest.e. Record the sale of all of the bonds on January 2 of Year 2 for $166,100.DateJan. 2, Year 2Account NameTo record the sale of investments.> > >Dr.Cr.00 ×00x00 xf. Record the adjustment to the Fair Value Adjustment account on December 31 of Year 2, assuming no additional TS investments.DateDec. 31, Year 2Account NameTo adjust FVA account.Dr.Cr.00 x00 × Entries for TS: Effective Interest Method Note: When answering the following questions, round answers to the nearest whole dollar. Amortization Schedule Journal Entries in Year 1, Journal Entries in Year 2 d. Record the receipt of interest onJanuary 1 of Year 2. e. Record the sale of all of the bonds on January 2 of Year 2 for $166, 100. f. Record the adjustment to the Fair Value Adjustment account on December 31 of Year 2, assuming no additional TS investments.

1) Value of Bond :Value of Bond is nothing present value of all future bond cash flows (Interest and…

Answered: d. Record the receipt of interest on…

Business

Accounting

d. Record the receipt of interest on January 1 of Year 2.

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

ACCT 102 - Please do subparts a-d, thank you. :) Parts a-c are to record transactions in general journal.
What account would be debited (1), what account would be credit (2), and what amount would be paid to record the journal entry for each interest payment based on a $100,000 five-year, 12% bond and the bond was issued at $103,769 (12%) and interest is paid semiannually? JOURNAL Page 25 DATE DESCRIPTION P.REF. DEBIT CREDIT (1) ? (2) ? (1) Interest Expense debit $6,000, and (2) Cash credit $6,000 (1) Interest Expense debit $12,000 and (2) Cash credit $12,000 (1) Cash debit $12,000 and (2) Interest Expense credit $12,000 (1) Cash debit $6,000, and (2) Interest Expense credit $6,000
Campbell, Inc. produces and sells outdoor equipment. On July 1, 20Y1, Campbell issued $40,000,000 of 10-year, 10% bonds at a market (effective) interest rate of 9%, receiving cash of $42,601,480. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds. 2. 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 interest method. b. The interest payment on June 30, 20Y2, and the amortization of the bond premium, using the interest method. 3. Determine the total interest expense for 20Y1.
The following amortization schedule indicates the interest and principal to be repaid on an installment note established January 1, 2021, for a company with a March 31 fiscal year-end. Period 1/1-12/31, Year 1 Interest Expense on Notes Payable $ 560 424 #TITT 286 144 1,414 1/1-12/31, Year 2 1/1-12/31, Year 3 1/1-12/31, Year 4 Total Beginning Notes Payable $ 28,000 21, 207 14, 278 Repaid Principal Ending Notes 7,210 $ 6,793 6,929 7,068 7,210 28,000 Payable $ 21,207 14,278 7,210 Required: 1. Assuming the company makes the required annual payments on December 31, use the amortization schedule to determine (a) the amount of the (rounded) annual payment; (b) the amount of Interest Expense to report in the year ended March 31, 2021; (c) the amount of Interest Expense to report in the year ended March 31, 2022; (d) the Notes Payable balance at January 1, 2024; and (e) the total interest and total principal paid over the note's entire life 2. Assuming the company makes adjustments at the end…
Compound interest is interest on any past unpaid interest accrued to date. calculated by multiplying the principal times the rate times the period of time. interest on the original principal paid or received. interest on the original principal plus any past unpaid accrued interest to date.
Ef 591.
The following details taken from the books of DiDi Sdn Bhd for the year ending 31 December 2020. DiDi Sdn Bhd Statement Profit or Loss for the year ending 31 December 2020 (extract) RM RM Gross profit 44,700 Add : Discount received 410 Profit on sale of van 620 1,030 45,730 Less: Expenses Motor expenses 1,940 Wages 17,200 General expenses 830 Bad debts 520 Increase in allowance for doubtful debts 200 Depreciation : van 1,800 22,490 23,240 Statement of Financial Position as at 31 December 2019 2020 RM RM RM RM Non-current Assets Vans at cost 15,400 8,200 less Depreciation (5,300) (3,100) 10,100 5,100 Current Assets Inventory 18,600 24,000 Trade accounts receivables less provision*…
Prepare all relevant journal entries for a four year 5% interest note issued on January 1
Majestic Corporation holds an investment in Cromwell bonds that pays interest eachOctober 31. Majestic’s balance sheet at December 31 should reporta. interest expense.b. interest revenue.c. interest payable.d. interest receivable.
Where is debt callable by the creditor reported on the debtor's financial statements? a) Long term liability b) Current liability if the creditor intends to call the debt within the year , otherwise a long term liability. c) Current liability if it is probable that creditor will call the debt within the year, otherwise a long term liability. d) current liability
1. 2. On January 1, 2025, Pina Company issued $132,000 of 7%, 10-year bonds at par. Interest is payable quarterly on April 1, July 1, October 1, and January 1. On June 1, 2025, Grouper Company issued $84,000 of 11%, 10-year bonds dated January 1 at par plus accrued interest. Interest is payable semiannually on July 1 and January 1. For each of these two independent situations, prepare journal entries to record the following.
7-7 On April 1, 2021, Baker Construction, Inc. signed a note for a loan from its bank. The following are the terms and other information pertaining to the loan: Amount of the loan ............................................................ $100,000 How long the loan is for (the term of the loan) ................... 1 year Date the loan was made .................................................... April 1, 2021 Date of first interest payment to the bank ........................... June 30, 2021 Amount of interest charged by the bank for April ............... $550 Amount of interest charged by the bank for May ................ $568 Amount of interest charged by the bank for June ............... $550 The following is a partial list of the accounts in Baker’s General Ledger. These are the only accounts you need for this problem.  Cash  Note Payable  Interest Payable  Interest Expense Requirement 1 Prepare the April 1, 2021 General Journal entry to record getting the loan from the…