Date of issue and sale: April 1, 20-1 Principal amount: $500,000 Sale price of bonds: 98 Denomination of bond
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Bonds Issued at a Discount
Brenner's Home Club issued the following bonds at a discount:
| Date of issue and sale: | April 1, 20-1 |
| Principal amount: | $500,000 |
| Sale price of bonds: | 98 |
| Denomination of bonds: | $1,000 |
| Life of bonds: | 10 years |
| Stated rate: | 7%, payable semiannually on September 30 and March 31 |
1. Prepare
a. Issuance of the bonds at a discount.
b. Interest payment and discount amortization on the bonds on September 30.
c. Year-end adjustment on the bonds.
If an amount box does not require an entry, leave it blank.
A journal entry is a basic accounting record that is used to chronologically track financial activities within a company. It usually includes important information including the date, the accounts involved, the sums, and a brief summary of the transaction. Journal entries are the first stage in the double-entry accounting system, and they ensure that every transaction is precisely documented by reflecting equal and opposite changes in accounts. These entries serve as the foundation for preparing financial statements and assessing a company's financial situation and performance.
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- Bond premium, entries for bonds payable transactionsO’Halloran, Inc. produces and sells outdoor equipment. On July 1, Year 1, O’Halloran, Inc. issued $32,000,000 of 6-year, 8% bonds at a market (effective) interest rate of 7%, receiving cash of $33,546,022. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.Instructions1. Journalize the entry to record the amount of cash proceeds from the issuance of the bond on July 1, Year 1.2. Journalize the entries to record the following:a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar.b. The second semiannual interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar.3. Determine the total interest expense for Year 1.Entries for Issuing Bonds and Amortizing Premium by Straight-Line Method Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley issued $8,900,000 of 8-year, 12% bonds at a market (effective) interest rate of 9%, receiving cash of $10,399,742. Interest is payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 1, 20Y1, If an amount box does not require an entry, leave it blank. b. Journalize the entry to record the first interest payment on October 1, 20Y1, and amortization of bond premium for six months, using the straight-line method. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. c. Why was the company able to issue the bonds for $10,399,742 rather than for the face amount of $8,900,000? The market rate of interest is - the contract rate of interest.Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Chin Company issued $10,000,000 of five-year, 7% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 8%, resulting in Chin receiving cash of $9,594,415. Question Content Area a. Journalize the entries to record the following: Issuance of the bonds. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. The straight-line method of amortization provides equal amounts…
- Entries for Issuing Bonds and Amortizing Premium by Straight-Line Method Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley issued $7,800,000 of 4-year, 12% bonds at a market (effective) interest rate of 11%, receiving cash of $8,047,047. Interest is payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 1, 20Y1. If an amount box does not require an entry, leave it blank. fill in the blank d175d3f50fce054_2 fill in the blank d175d3f50fce054_3 fill in the blank d175d3f50fce054_5 fill in the blank d175d3f50fce054_6 fill in the blank d175d3f50fce054_8 fill in the blank d175d3f50fce054_9 b. Journalize the entry to record the first interest payment on October 1, 20Y1, and amortization of bond premium for six months, using the straight-line method. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. fill…Gia Company had the following bond issue: Date of issue/sale: April 1, 20-A Face value: $200,000 Sale price of bonds: 99 Life of bonds: 10 years Stated rate: 6% a year payable semiannually on September 30 and March 31 Required: Prepare the following general journal entries. a. The issuance of the bonds on April 1, 20-A. b. The interest payment and premium amortization for first six months. c. The redemption of $50,000 worth of bonds on April 1, 20-E, at 102. If an amount box does not require an entry, leave it blank. Page: 1 DATE DESCRIPTION POST.REF. DEBIT CREDIT 1 a. Apr. 1 1 2 2 3 3 4 4 5 b. Sept. 30 - Select - - Select - 5 6 - Select - - Select - 6 7 - Select - - Select - 7 8 8 9 c. Apr. 1 - Select - - Select - 9 10 - Select - - Select - 10 11 - Select - - Select - 11 12 - Select - - Select - 12Entries for Issuing Bonds and Amortizing Premium by Straight-Line Method Instructions Chart of Accounts Journal Final Question Instructions Favreau Corporation wholesales repair products to equipment manufacturers. On April 1. Year 1, Favreau Corporation issued $12,700,000 of five-year, 11% bonds at a market (effective) interest rate of 9%, receiving cash of S13,704,946. Interest is payable semiannually on April 1 and October 1. Required: a. Journalize the entries to record the following. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. 1. Issuance of bonds on April 1. 2. First interest payment on October 1 and amortIzation of bond premium for six months, using the straight-line method. The bond premium amortization is combined with the semiannual…
- ABC Company issued $20,000 of 5-year bonds, stated rate 10%, effective rate 8%, interest paid semi-annually at 108 on 1/1/00. match the correct set of journal entries for The first interest payment The issuance of the bonds 1. 2. 3. 4. Cash Cash Premium Bond Payable Premium Bond Payable Interest exp Premium Cash Interest exp Premium 20,800 21,600 832 160 Cash 800 20,000 1,600 20,000 1,000 864 136 1,000Entries for Issuing Bonds and Amortizing Premium by Straight-Line Method Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley issued $8,500,000 of 8-year, 6% bonds at a market (effective) interest rate of 4%, receiving cash of $9,654,106. Interest is payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 1, 20Y1. If an amount box does not require an entry, leave it blank. Cash fill in the blank fill in the blank Premium on Bonds Payable fill in the blank fill in the blank Bonds Payable Journalize the entry to record the first interest payment on October 1, 20Y1, and amortization of bond premium for six months, using the straight-line method. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Interest Expense fill in the blank fill in the blank Premium on Bonds Payable fill in the blank fill in the…Entries for issuing bonds and amortizing premium by straight-line method Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley issued $6,400,000 of 4-year, 7% bonds at a market (effective) interest rate of 5%, receiving cash of $6,858,887. Interest is payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 1, 20Y1. If an amount box does not require an entry, leave it blank. Cash Account Premium on Bonds Payable Bonds Payable Cash Interest Expense Premium on Bonds Payable Account Feedback Debit Check My Work 6,858,887 0 b. Journalize the entry to record the first interest payment on October 1, 20Y1, and amortization of bond premium for 6 months, using the straight-line method. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Debit 0 Credit 000 0 6,400,000 Credit nt fare value. Any difference in issue price is reflected in a premium or discount…
- Bond Discount, Entries for Bonds Payable Transactions On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $2,500,000 of 8-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $2,369,220. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1. Cash Cash Discount on Bonds Payable Discount on Bonds Payable Bonds Payable Bonds Payable Feedback Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 20Y1, and the…Entries for issuing bonds and amortizing premium by straight-line method Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley issued $20,000,000 of 5-year, 9% bonds at a market (effective) interest rate payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 1, 20Y1. If an amount box does not require an entry, leave it blank. Account Debit Credit Cash Premium on Bonds Payable Bonds Payable Feedback Me How Interest Expense Premium on Bonds Payable Cash Check My Work Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. The straight-line method of amortization provides equal bond. Feedback b. Journalize the entry to record the first interest payment on October 1, 20Y1, and amortization of bond premium for 6 months, using the straight-line method. If an amount box does not Account Debit Credit Check My Work 20,811,010…Payable journal Entries; Straight - Line Interest Amortization and discount tamortization (staight ine interest method on June On December 31, Brown Company issued $450,000 of 20 -year, eight percent bonds payable for $377,784 yielding an effective interest rate of tem percent, interest is payable senttannually on June 30 and December 31. Prepare joumal entries to reflect (a) the issuance of the bonds, (b) the semiannual interest payment a 30, and (c) the semiannual interest payment and discount amortization on December 31.
