Chap 9 Q.2 rks Profiles Tab Window HelpakeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSession Locator=&inprogress=falseCourse HomeCul... P Sp23 Math 1080-...eBookEntries for issuing bonds and amortizing discount by straight-line methodOn the first day of its fiscal year, Chin Company issued $20,600,000 of 5-year, 6% bonds to finance its operations of producing and selling home improvement products. Interest ispayable semiannually. The bonds were issued at a market (effective) interest rate of 7%, resulting in Chin receiving cash of $19,743,417.a. Journalize the entries to record the following:1. Issuance of the bonds.2. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.)3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.)If an amount box does not require an entry, leave it blank.I1. Cash✓Discount on Bonds PayableBonds Payable✓2. Interest Expense✓Discount on Bonds PayableCash✓3. Interest Expense✓Discount on Bonds PayableCashShow Me HowFeedback.✓✓Q☆ k ✰000000PreviousNext >Up arks Profiles Tab Window HelptakeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSession Locator=&inprogress=falseCourse HomeCul... P Sp23 Math 1080-...eBookFeedbackb. Determine the amount of the bond interest expense for the first year.$Show Me HowCheck My WorkBonds 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 providesequal amounts of amortization over the life of the bond.c. Why was the company able to issue the bonds for only $19,743,417 rather than for the face amount of $20,600,000?The market rate of interest is greater than ✔the contract rate of interest. Therefore, inventors are notFeedbackFeedbackCheck My Workb. Remember that the amortization of a bond discount or premium affects the amount of interest expenses recorded.c. Bonds will be issued for either a higher or lower amount than the face value when the market and contract rates of interest are different.Check My WorkPartially correctQ Û ☆ k✓willing to pay the full face amount of the bonds.(

Journal Entry :— It is an act of recording transaction in books of account when transaction…

Entries for issuing bonds and amortizing discount by straight-line method On the first day of its fiscal year, Chin Company issued $20,600,000 of 5-year, 6% bonds to finance its operations of producing and selling home improvement products. Inte payable semiannually. The bonds were issued at a market (effective) interest rate of 7%, resulting in Chin receiving cash of $19,743,417. a. Journalize the entries to record the following: 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) 3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) If an amount box does not require an entry, leave it blank. I 1. Cash - ✓ Discount on Bonds Payable Bonds Payable 2. Interest Expense ✓ Discount on Bonds Payable Cash ✓ Discount on Bonds Payable ✓ 3. Interest Expense Cash Feedback ✓ ✓ ✓ 000 000 000 000 Previous

Entries for issuing bonds and amortizing discount by straight-line method On the first day of its fiscal year, Chin Company issued $20,600,000 of 5-year, 6% bonds to finance its operations of producing and selling home improvement products. Inte payable semiannually. The bonds were issued at a market (effective) interest rate of 7%, resulting in Chin receiving cash of $19,743,417. a. Journalize the entries to record the following: 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) 3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) If an amount box does not require an entry, leave it blank. I 1. Cash - ✓ Discount on Bonds Payable Bonds Payable 2. Interest Expense ✓ Discount on Bonds Payable Cash ✓ Discount on Bonds Payable ✓ 3. Interest Expense Cash Feedback ✓ ✓ ✓ 000 000 000 000 Previous

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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