Answered: Each P1,000 bond can be converted into…

Name: The following information was obtained from the statement of financia
Uploaded: 2022-11-04T13:36:16.000Z
Channel: Bartleby
Description: The following information was obtained from the statement of financial position of NORWAY, INC. on December 31,2017:6% convertible 10-year bonds at parOrdinary share capital, P20 par,110,000 shares issued and outstandingRetained earningsP2,000,0002,

Business

Accounting

Each P1,000 bond can be converted into 40 ordinary shares. On September 30, 2018, the bonds were all converted

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

JJ Company issued an 8%, P8,400,000 bonds at 120 on January 1, 2019. Interest on these bonds is paid every June 30 and December 31. Moreover, bonds mature every December 31 at the following rates: 2020, P1,800,000; 2022, P3,000,000; 2023, P1,500,000; and 2024, 2,100,000, respectively. On December 31, 2020, P800,000 bonds maturing on December 31, 2023 were retired at 98. 1. Compute for the issue price of the bonds on January 1, 2019. 2. Compute for the bonds outstanding for the year 2022. 3. Compute for the gain or loss on retirement. (Note: If it is a loss, use negative sign. Example, -1,000.) 3. Compute for the gain or loss on retirement. (Note: If it is a loss, use negative sign. Example, -1,000.)
Abc company issued a bond on january 2 2020 with a face value of 800,000 and sold at 775,000. this bond is a discount bond
On April 1, 2024, Déjà Vu Company issued 12% bonds that have a total face value of $140,000 (each bond has a face value of $1,000). The bonds sold for $164,023 and mature in 20 years. The effective interest rate for the bonds was 10% on 4/1/24. Interest is paid semiannually on September 30 and March 31. The market value of the bonds was 102 on 12/31/24 and $104 on 12/31/25. The market rate of interest on the bonds fell to 9% on 8/1/24. David Company purchased all of the bonds as an investment on 4/1/2024. A partial amortization schedule appears below. 9/30/2024 8,400 3/31/2025 8,400 9/30/2025 8,400 3/31/2026 8,400 9/30/2026 8,400 3/31/2027 8,400 9/30/2027 8,400 Cash Interest $__ Interest Income 8,201 8,191 8,181 8,170 8,158 8,146 8,134 $_ Premium Amortized 199 209 219 230 242 254 266 What is the amount of assets related to the bonds on David's balance sheet: As of 12/31/24 if the bonds are accounted for as held-to-maturity. Carrying Value 164,023 163,824 163,615 $_ As of 12/31/2024 if…
Leong Corporation was authorized to issue $500,000 face value bonds on January 1, 2017. The corporation issued $100,000 of face value bonds on that date. The bonds will mature on December 31, 2020. Interest is paid semi-annually on June 30 and December 31 each year. The bond interest rate per the terms of the indenture is 12% per year. Required: Answer the questions for each of the following cases. Case A: The bonds were issued at face value. Case B: The bonds were issued for $112,000. Case C: The bonds were issued for $88,000. a. How much cash does Leong receive for the bonds? b. How much annual interest must the corporation pay? On what amount does the corporation pay? c. Prepare the journal entry to record the sale of the bonds. d. Record the entries applicable to interest and straight-line amortization for June 30, 2017 and for December 31, 2017.
Spurrier Corp. has 10-year bonds with a face value of $400,000 and a carrying value of $420,345 as of 12/31/19. On June 30, 2020, they pay their bondholders $12,000 and recognize $10,509 in interest expense. Please provide the June 30, 2019 carrying value of the bonds after the interest payment.
Splish Corporation issued 4,000, five year, 4% bonds at 106 on January 1, 2023. Interest is paid annually. Each $1,000 bond carried one detachable warrant allowing the holder to purchase 100 common shares in Splish at $11 per share, the price at which Splish shares were trading on the day of the sale of the bonds. Similar straight bonds trading on the open market paid 5%. On June 30, 2023, 800 of the bond holders exercised the options to buy the shares. Prepare the journal entries to record these events. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal places e.g. 58,971. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. List all debit entries before credit entries.) Date ary 1, 2023 0, 2023 Account Titles and Explanation…
On January 1, 2016, Cooper Corporation issued $800,000 of 12.5% bonds due January 1, 2023, at 102. The bonds pay interest semiannually on June 30 and December 31. Each $1,000 bond carried 10 warrants which allowed the acquired to exchange 1 share of $10 par common stock for $50. Sometime after the bonds were issued the bonds were quoted at 98 ex-rights and each individual warrant was quoted at $5. Subsequently, on April 30, 2017, 2,000 rights were exercised. Required: 1. Prepare the journal entry to record the bond issue. 2. Prepare the journal entries on April 30, 2017, to record the exchange of the warrants for common shares.
Chris Corporation issued a 300,000 5% 10 year bond payable on January 1st 2018. Journalize the payment of the bond payable at maturity.
On January 1, 2026, Baker Company purchased, as an investment, 5% bonds, having a maturity value of $150,000, for $138,400. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2026, and mature January 1, 2036, with interest receivable June 30 and December 31 of each year. The securities are classified as available-for-sale. January 1, 2026 June 30, 2026 December 31, 2026 June 30, 2027 December 31, 2027 June 30, 2028 December 31, 2028 Schedule of Interest Revenue and Bond Amortization Amortization Cash Received (2.5%) Interest Revenue (3.5%) 3,750 3,750 3,750 3,750 3,750 3,750 4,844 4,882 4,922 4,963 5,005 5,049 The fair value of the bonds at December 31 of each year-end is as follows. 2026 145,000 2027 148,000 2028 152,000 1,094 1,132 1,172 1,213 1,255 1,299 Carrying Value 138,400 139,494 140,626 141,798 143,011 144,266 145,565 a) Prepare the journal entry at the date of the investment purchase. b) Prepare the journal entries to record the interest received on…
ABC Co. issued 1.000 convertible bonds at the beginning of 2019. The bonds have a four-year term with a stated rate of interest of 6 percent, and are issued at par with a face value of Rp1.000 per bond (the total proceeds received from issuance of the bonds are Rp1.000.000). Interest is payable annually at December 31. Each bond is convertible into 250 ordinary shares with a par value of Rp1. The market rate of interest on similar non-convertible debt is 9 percent. On December 31, 2020, ABC wishes to reduce its annual interest cost. The company agrees to pay the holder of its convertible bonds an additional Rp40.000 if they will convert. Assuming conversion occurs, ABC’s journal entry to record the conversion will include all of the following, except:
$400,000 is issued of 8-year, 4% bonds at par on January 1, 2022. The bonds pay interest annually. Compute the total cost of borrowing for this bond.
Clear Water Corp. issued $100,000 of 7% 5 year convertible bonds on January 1, 2015. The bonds were issued at 104 and pay interest on June 30 and December 31 of each year. By December 31, 2018, the market price of the stock had increased, and the investors decided to convert the bonds into stock. Each $1,000 bond is convertable into 30 shares of the $2 par value common stock. Determine the balance of the Premium on the bonds and prepare the journal entry to record the conversion of the bonds. (two questions) GENERAL JOURNAL POST Date Account/Description REF. Debit Credit