Diana Inc. issued $150,000 of its 6%, 5-year bonds for $143,773 when the market rate was 7%. The bonds pay interest semi-annually. Prepare an amortization table for the firstthree payments. Round intermediate and final answers to whole dollar amount.Cash InterestPaymentJan. 1, Year 1June 30, Year 1Dec. 31, Year 1June 30, Year 2$5,2505,2505,250Interest onCarrying Value$Amortization ofDiscountCarrying Value143,773

Bonds are debt securities issued by companies, governments, or other entities to raise capital. When…

Answered: Diana Inc. issued $150,000 of its 6%,…

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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Diana Inc. issued $300,000 of its 5%, 5-year bonds for $287,215 when the market rate was 6%. The bonds pay interest semi-annually. Prepare an amortization table for the first three payments. Round intermediate and final answers to whole dollar amount. Cash InterestPayment Interest onCarrying Value Amortization ofDiscount Carrying Value Jan. 1, Year 1 $fill in the blank 1 June 30, Year 1 $fill in the blank 2 $fill in the blank 3 $fill in the blank 4 fill in the blank 5 Dec. 31, Year 1 fill in the blank 6 fill in the blank 7 fill in the blank 8 fill in the blank 9 June 30, Year 2 fill in the blank 10 fill in the blank 11 fill in the blank 12 fill in the blank 13
On May 1, Holiday Company issued $200,000, 9%, 10-year bonds for $213,591 when the market rate was 8%. Prepare the general journal entry for the first semiannual interest payment and bond premium amortization on November 1, using the effective interest method. Round all amounts to the nearest dollar.
The following transactions were completed by Montague Inc., whose fiscal year is the calendar year: 20Y1 July 1. Issued $55,000,000 of 10-year, 9% callable bonds dated July 1, 20Y1, at a market (effective) rate of 7%, receiving cash of $62,817,040. Interest is payable semiannually on December 31 and June 30. Dec. 31. Paid the semiannual interest on the bonds. The bond discount amortization of $390,852 is combined with the semiannual interest payment. 20Y2 June 30. Paid the semiannual interest on the bonds. The bond discount amortization of $390,852 is combined with the semiannual interest payment. Dec. 31. Paid the semiannual interest on the bonds. The bond discount amortization of $390,852 is combined with the semiannual interest payment. 20Y3 June 30. Recorded the redemption of the bonds, which were called at 103. The balance in the bond premium account is $6,253,632 after payment of interest and amortization of premium have been recorded. (Record the…
On January 1, Topeka Outfitters issued $175,000 of 6%, 3-year bonds when the market rate of interest was 10%. The bonds pay interest semiannually on June 30 and December 31. Prepare an amortization table for the bond issue.
On January 1, a company issues bonds dated January 1 with a par value of $350,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $335,819. The journal entry to record the first interest payment using straight-line amortization is: Multiple Choice Debit Interest Expense $10,831.90; debit Discount on Bonds Payable $1,418.10; credit Cash $12,250,00 Debit Interest Expense $13,668.10, credit Discount on Bonds Payable $1,418.10, credit Cash $12,250.00 Debit Interest Expense $12,250.00, credit Cash $12.250.00 Debit interest Expense $13,668.10; credit Premium on Bonds Payable $1,418.10; credit Cash $12,250,00 Debit interest Payable $12.250.00; credit Cash $12.250.00
On January 1, a company issued 3%, 20-year bonds with a face amount of $80 million for $69,057,808 to yield 4%. Interest is paid semiannually. What was the interest expense at the effective interest rate on the December 31 annual income statement? (Enter your answer in whole dollars. Round your intermediate calculations to the nearest dollar amount.)
Oak Branch Inc. issued $900,000 of 5%, 10-year bonds when the market rate was 4%. They received $973,595. Interest was paid semi-annually. Prepare an amortization table for the first three years of the bonds. Round intermediate and final answers to whole dollar amount. Jan. 1, Year 1 June 30, Year 1 Dec. 31, Year 1 June 30, Year 2 Dec. 31, Year 2 June 30, Year 3 Dec. 31, Year 3 Cash Interest Payment ✔ 22,500 22,500 ✓ 22,500 ✔ 22,500 ✔ 22,500 ✓ 22,500 ✓ Interest on Carrying Value 19,472 19,411 V ✓ 19,350 ✔ 19,287 ✔ 19,222 ✔ 19,157 ✔ Amortization of Premium 3,028 3,089 3,150 ✔ ✓ 3,213 3,278 ✓ 3,343 ✔ Carrying Value 973,595 970,567 967,478 ✔ 964,328 ✔ 961,114 X 957,837 ✔ 954,493 X
On January 1, $980,000, 5-year, 10% bonds were issued for $950,600. Interest is paid semiannually on January 1 and July 1. If the issuing company uses the straight-line method to amortize a discount on bonds payable, the semiannual amortization amount is
During two consecutive years, Antlers Company, Inc., completed the following transactions: Year 1 June 1 Issued $750,000 face value, 20-year, 12 percent bonds, dated June 1 of this year, at 103. Interest is payable semiannually on December 1 and June 1. Dec. 1 Paid semiannual interest on the bonds. 31 Recorded an adjusting entry for accrued interest payable. 31 Recorded an adjusting entry for amortization of premium on bonds. 31 Closed the Interest Expense account. Year 2 Jan. 1 Reversed the adjusting entry for accrued interest payable. June 1 Paid semiannual interest on the bonds. Dec. 1 Paid semiannual interest on the bonds. June 31 Recorded an adjusting entry for accrued interest payable. 31 Recorded an adjusting entry for amortization of premium on bonds. 31 Closed the Interest Expense account. Can I get some help for the second year?
Diaz Company issued bonds with a $149,000 face value on January 1, Year 1. The bonds had a 6 percent stated rate of interest and a 10-year term. Interest is paid in cash annually, beginning December 31, Year 1. The bonds were issued at 97. The straight-line method is used for amortization. Required a. Use a financial statements model like the one shown next to demonstrate how (1) the January 1, Year 1, bond issue and (2) the December 31, Year 1, recognition of interest expense, including the amortization of the discount and the cash payment, affect the company's financial statements. Note: Use + for increase or for decrease. In the Statement of Cash Flows column, use the initials OA to designate operating activity, IA for investing activity, and FA for financing activity. Not all cells require input. Effect of Transactions on Financial Statements Event Number Assets Balance Sheet Liabilities Income Statement Stockholders' Equity Revenue Expense Net Income Statement of Cash Flows 1. 2.…
A company issues $50,000 of 5%, 10-year bonds dated January 1 and pay interest semiannually on June 30 and December 31 each year. The bonds are sold for 48,000. Using straight-line amortization method, the company will amortize the discount by $_________ on each semiannual interest payment.
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

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