Answered: deposit

Business

Accounting

deposit

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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4. Compute the annual cost for interest and redemption of these bonds
Thompson Distributors sold $50,000 worth of bonds to raise money for a new warehouse. The bonds pay interest annually at 4% for 10 years. The market rate of interest for a similar instrument was 3%; therefore, the bonds sold for a premium at $54,265. a. Record the sale of the bonds. b. Record the first interest payment and the amortization of the bond premium. Round the interest to the nearest dollar. c. Determine the carrying value (book value) of the bonds after the first year. General Journal Date Account Debit Credit a. b.
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Boyd Co. produces and sells aviation equipment. On the first day of its fiscal year, Boyd issued $83,000,000 of five-year, 8% bonds at a market (effective) interest rate of 10%, with interest payable semiannually. This information has been collected in the Microsoft Excel Online file. The amount of discount to be amortized for the first semiannual interest payment period, using the interest method. Round your answer to the nearest dollar.
Sepia Inc. issued $350,000 bonds that were redeemable in 7 years. They established a sinking fund that was earning 5.50% compounded semi-annually to pay back the principal of the bonds on maturity. Deposits were being made into the fund at the end of every 6 months. a. Calculate the size of the periodic sinking fund deposits. b. Calculate the sinking fund balance at the end of the 4th payment period. c. Calculate the amount of interest earned during the 5th payment period. d. Calculate the amount by which the sinking fund increased in the 5th payment period.
Blossom Company issued $700,000, 9-year bonds. It agreed to make annual deposits of $75,500 to a fund (called a sinking fund), which will be used to pay off the principal amount of the bond at the end of 9 years. The deposits are made at the end of each year into an account paying 4% annual interest. Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) What amount will be in the sinking fund at the end of 9 years? (Round answer to 2 decimal places, e.g. 25.25.) Amount in the sinking fund $ 803100.94
A corporation issues for cash $14,000,000 of 8%, 20-year bonds, interest payable annually, at a time when the market rate of interest is 9%. The straight-line method is adopted for the amortization of bond discount or premium. Which of the following statements is true? A. The amount of annual interest paid to bondholders remains the same over the life of the 9. bonds. B. The amount of annual interest expense decreases as the bonds approach maturity. C. The amount of annual interest paid to bondholders increases over the 20-year life of the bonds. D. The carrying amount decreases from its amount at issuance date to $14,000,000 at maturity.
A Corporation has a 6%, $500,000 bond issue that originally was issued 5 years ago. There are now eight years remaining on the bond issue, and the market interest rate is 10%. Interest is paid semiannually. Calculate the current market value of the bond issue, using present value tables. Please label all work.
A company issues $12 million in term bonds on March 1, Year One, for face value. The bonds pay a stated cash interest rate of 10 percent per year. Interest payments are made every February 28 and August 31. On financial statements for Year One, what is recognized as interest expense on the income statements? Responses $12,000,000 $300,000 $1,200,000 $1,000,000
Boyd Co. produces and sells aviation equipment. On the first day of its fiscal year, Boyd issued $74,000,000 of three-year, 9% bonds at a market (effective) interest rate of 13%, with interest payable semiannually. The amount of cash proceeds from the sale of the bonds. Round your answer to the nearest dollar. $ fill in the blank 2 The amount of discount to be amortized for the first semiannual interest payment period, using the interest method. Round your answer to the nearest dollar. $ fill in the blank 3 The amount of discount to be amortized for the second semiannual interest payment period, using the interest method. Round your answer to the nearest dollar. $ fill in the blank 4 The amount of the bond interest expense for the first year. Round your answer to the nearest dollar. $ fill in the blank 5
Sepia Inc. issued bonds for $450,000 that were redeemable in 6 years. They established a sinking fund that was earning 4.87% compounded semi-annually to pay back the principal of the bonds on maturity. Deposits were being made to the fund at the end of every 6 months. a. Calculate the size of the periodic sinking fund deposit. b. Calculate the sinking fund balance at the end of the payment period 8. c. Calculate the interest earned in payment period 9. d. Calculate the amount by which the sinking fund increased in payment period 9.
Oriole Company issued $1,000,000, 9-year bonds. It agreed to make annual deposits of $77,500 to a fund (called a sinking fund), which will be used to pay off the principal amount of the bond at the end of 9 years. The deposits are made at the end of each year into an account paying 9% annual interest. Click here to view the factor table. What amount will be in the sinking fund at the end of 9 years? (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answer to 2 decimal places, eg. 25.25) Amount in the sinking fund $