E9-26A. (Learning Objective 3: Issuing bonds payable [discount]; recording interest payments and the related bond amortization) Target Sports Ltd. is authorized to issue $1,600,000 of 10%, 10-year bonds payable. On December 31, 20X0, when the market interest rate is 12%, the company issues $1,250,000 of the bonds. Target Sports Ltd. amortizes bond discounts by the effective-interest method. The semi-annual interest dates are June 30 and December 31. Requirements 1. Prepare a bond amortization table for the first four semi-annual interest periods. 2. Record issuance of the bonds payable on December 31, 20X0, the first semi-annual interest payment on June 30, 20X1, and the second payment on December 31, 20X1.

E9-26A. (Learning Objective 3: Issuing bonds payable [discount]; recording interest payments and the related bond amortization) Target Sports Ltd. is authorized to issue $1,600,000 of 10%, 10-year bonds payable. On December 31, 20X0, when the market interest rate is 12%, the company issues $1,250,000 of the bonds. Target Sports Ltd. amortizes bond discounts by the effective-interest method. The semi-annual interest dates are June 30 and December 31. Requirements 1. Prepare a bond amortization table for the first four semi-annual interest periods. 2. Record issuance of the bonds payable on December 31, 20X0, the first semi-annual interest payment on June 30, 20X1, and the second payment on December 31, 20X1.

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

On January 1, 2024, Teachers Credit Union (TCU) issued 7%, 20-year bonds payable with face value of $900,000. The bonds pay interest on June 30 and December 31. Read the requirements. Requirement 1. If the market interest rate is 5% when TCU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain. The 7% bonds issued when the market interest rate is 5% will be priced at a premium. They are attractive in this market, so investors will pay more than face value to acquire them. Requirement 2. If the market interest rate is 8% when TCU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain. The 7% bonds issued when the market interest rate is 8% will be priced at a discount. They are unattractive in this market, so investors will pay less than face value Requirement 3. The issue price of the bonds is 95. Journalize the bond transactions. (Assume bonds payable are amortized using the straight-line…
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.
Discuss the following terms as they relate to the presentation of cash‐flowinformation: i. Liquidityii. Solvencyiii. Financial flexibility
Please help me to answer with clear computation the Required 1 and 2 of this Problem. Thank you so much!
Franklin corporation issues $86,000, 10%, 5 year bonds on January 1st for $89,900. Interest paid semi-annually on January 1st and July 1st. Is Franklin uses the straight line method of amortization of bond premium, the amount of bond interest expense to be recognized on July 1st is
On January 1, $834,000, 5-year, 10% bonds, were issued for $808,980. Interest is paid semiannually on January 1 and July 1. If the issuing corporation uses the straight-line method to amortize discount on bonds payable, what is the semiannual amortization amount? Select the correct answer. $5,004 $2,502 $41,700 O $25,020
2. Proctec Trust Inc. issued S100,000, 5 year bond on January 1, 2018 paying 4% intereston a semi-annual basis every January 1 and July 1. Instructions Using a financial calculator, or tables on pg. 550 – 551(students can also use pre-built excel formulas if they are expert users of excel program) prepare the first year journal entries for the bond issue and interest expense assuming that the company uses the effective interest method, a market interest rate of 6% and has a year-end of December 31, 2018
On January 1 of the current year, the Queen Corporation issued 12% bonds with a face value of $83,000. The bonds are sold for $80,510. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, five years from now. Queen records straight-line amortization of the bond discount. Determine the bond interest expense for the year ended December 31. Select the correct answer. a-$830 b-$10,458 c-$2,490 d-$9,960
Bee Inc. issues P 3,000,000, 9%, bonds for P 2,817,000. The market interest rate for these bonds is 10%. Interest is payable annually on December 31. The company uses effective-interest method in amortization. At the end of the second year, Bee, Inc should report unamortized bond discount of:a. P 164,700b. P 171,300c. P 158,430d. P 154,830
Hh1.
S6. Account
(Learning Objectives 1, 6: Record bond transactions at par; report bonds payableon the balance sheet) The board of directors of Canterbury Plus authorized the issue of$9,000,000 of 7%, 15-year bonds payable. The semiannual interest dates are May 31 andNovember 30. The bonds are issued on May 31, 2018, at par.Requirements1. Journalize the following transactions:a. Issuance of half of the bonds on May 31, 2018b. Payment of interest on November 30, 2018c. Accrual of interest on December 31, 2018d. Payment of interest on May 31, 20192. Report interest payable and bonds payable as they would appear on the company’s balancesheet at December 31, 2018.