**Institution Page: Discount Amortization**On the first day of the fiscal year, a company issues a $4,200,000, 10%, five-year bond that pays semiannual interest of $210,000 ($4,200,000 × 10% × ½), receiving cash of $4,041,710.Journalize the first interest payment and the amortization of the related bond discount. If an amount box does not require an entry, leave it blank.**Fields to Fill:**1. **Interest Expense:** - Debit: [Amount] 2. **Discount on Bonds Payable:** - Debit: [Amount]3. **Cash:** - Credit: [Amount]**Feedback:**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 of amortization over the life of the bond.**Navigation:**- Button: Check My Work- Options: Previous, Next- Date & Time Display: October 8, 7:56 PM

The bonds are the long-term liabilities for the business. The bonds are issued to raise money from…

Discount Amortization On the first day of the fiscal year, a company issues a $4,200,000, 10% , five-year bond that pays semiannual interest of $210,000 ($4,200,000 x 10 % *%), receiving cash of $4,041,710. Journalize the first interest payment and the amortization of the related bond discount. If an amount box does not require an entry, leave it blank Interest Expense Discount on Bonds Payable Cash Feedback Check My Work Bonds Payable is always recorded at face value. Any difference in issua prin

Discount Amortization On the first day of the fiscal year, a company issues a $4,200,000, 10% , five-year bond that pays semiannual interest of $210,000 ($4,200,000 x 10 % *%), receiving cash of $4,041,710. Journalize the first interest payment and the amortization of the related bond discount. If an amount box does not require an entry, leave it blank Interest Expense Discount on Bonds Payable Cash Feedback Check My Work Bonds Payable is always recorded at face value. Any difference in issua prin

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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What would be the required journal entry on the date of issuance if a company issues $100,000 five-year, 10% bond for $103,769 and the interest is to be paid semiannually? debit cash, $100,000, and credit bond payable $100,000 debit cash $103,769, and credit bond payable $100,000 and credit premium on bonds payable $3,769 debit bonds payable $103,769 and debit discount on bonds payable $3,769, and credit cash $100,000 debit cash $103,769 and debit discount on bonds payable $3,769, and credit bonds payable $100,000
Premium Amortization On the first day of the fiscal year, a company issues a $9,000,000, 9%, 8-year bond that pays semiannual interest of $405,000 ($9,000,000 × 9% × ½), receiving cash of $9,524,354. Journalize the first interest payment and the amortization of the related bond premium. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.
Premium Amortization On the first day of the fiscal year, a company issues a $8,700,000, 10%, 6-year bond that pays semiannual interest of $435,000 ($8,700,000 x 10 % x V), receiving cas of $9,516,500. Journalize the first interest payment and the amortization of the related bond premium. Round to the nearest dollar. If an amount box does not require an entry, leave it blank €88
On the first day of the fiscal year, a company issues a $8,500,000, 6%, 5-year bond that pays semiannual interest of $255,000 ($8,500,000 \times 6% \times (1)/(2)), receiving cash of $7,491, 128. Using straight - line amortization, journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.
Premium Amortization On the first day of the fiscal year, a company issues a $5,100,000, 8%, 5-year bond that pays semiannual interest of $204,000 ($5,100,000 × 8% × ½), receiving cash of $5,312,072. Journalize the first interest payment and the amortization of the related bond premium Round to the nearest dollar If an amount box does not require an entry, leave it blank.
Premium amortization On the first day of the fiscal year, a company issues a $3,600,000, 11%, 10-year bond that pays semiannual interest of $198,000 ($3,600,000 x 11% x 1/2), receiving cash of $4,068,286. Using straight-line amortization, journalize the first interest payment and the amortization of the related bond premium. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Interest Expense Premium on Bonds Payable Cash Feedback ▼ Check My Work ✓ 198,000 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 of amortization over the life of the bond.
On the first day of the fiscal year, a company issues an $609,000, 10%, five-year bond that pays semiannual interest of $30,450 ($609,000 x 10% x 1/2), receiving cash of $572,500. Journalize the entry to record the first interest payment and the amortization of the related bond discount using the straight-line method.
Issuing Bonds at Face Amount On January 1, the first day of the fiscal year, Designer Fabric Inc. issues a $250,000, 8%, 10-year bond that pays semiannual interest of $10,000 ($250,000 x 8% x ½ year), receiving cash of $250,000. (a) Journalize the entry to record the issuance of the bonds. If an amount box does not require an entry, leave it blank. (b) Journalize the entry to record the first interest payment on June 30. If an amount box does not require an entry, leave it blank. (c) Journalize the entry to record the payment of the principal on the maturity date. If an amount box does not require an entry, leave it blank. 8
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Premium Amortization On the first day of the fiscal year, a company issues a $3,500,000, 6%, 9-year bond that pays semiannual interest of $105,000 ($3,500,000 × 6% × ½), receiving cash of $4,322,808. Journalize the first interest payment and the amortization of the related bond premium. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Interest Expense Premium on Bonds Payable Cash
On the first day of the fiscal year, a company issues a $621,000, 11%, 10-year bond that pays semiannual interest of $34,155 ($621,000 × 11% × 1/2), receiving cash of $652,050. Required: Journalize the entry to record the first interest payment and amortization of premium using the straight-line method. Refer to the Chart of Accounts for exact wording of account titles. Chart Of Accounts CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 113 Allowance for Doubtful Accounts 114 Notes Receivable 115 Interest Receivable 121 Merchandise Inventory 122 Supplies 131 Prepaid Insurance 140 Land 151 Building 152 Accumulated Depreciation-Building 153 Equipment 154 Accumulated Depreciation-Equipment LIABILITIES 210 Accounts Payable 221 Salaries Payable 231 Sales Tax Payable 241 Notes Payable 242 Interest Payable 251 Bonds Payable 252 Discount on Bonds…
Issuing Bonds at a Premium On the first day of the fiscal year, a company issues a $5,300,000, 8%, five-year bond that pays semiannual interest of $212,000 ($5,300,000 x 8% x ½), receiving cash of $5,520,390. Journalize the bond issuance. If an amount box does not require an entry, leave it blank. Previous Next Wodk Angieriment for Grading