Exercise 10-1 Recording bond issuance and interest LO P1On January 1, 2017, Boston Enterprises issues bonds that have a $1,700,000 par value, mature in 20 years, and pay 9%interest semiannually on June 30 and December 31. The bonds are sold at par.1. How much interest will Boston pay (in cash) to the bondholders every six months?2. Prepare journal entries to record (a) the issuance of bonds on January 1, 2017; (b) the first interest payment on June30, 2017; and (c) the second interest payment on December 31, 2017.3. Prepare the journal entry for issuance assuming the bonds are issued at (a) 98 and (b) 102.Complete this question by entering your answers in the tabs below.Required 1Required 2Required 3How much interest will Boston pay (in cash) to the bondholders every six months?SemiannualSemiannual CashPar (maturity) ValueRateInterest PaymentхRequired 1Required 2 >

1) Computation of interest paid by Boston in cash to the bond holders at every six months Par…

Answered: Exercise 10-1 Recording bond issuance…

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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Cornerstone Exercise 9-46 (Appendix 9A) Bond Issue Price On December 31, 2014, Callahan Auto issued $900,000 of 9%, 10-year bonds. Interest is payable semiannually on June 30 and December 31. Required: What is the issue price if the bonds are sold to yield 8%? Follow the format shown in Present Value tables as you complete the requirement. If required, round your calculations and final answer to the nearest whole dollar.$
PROBLEM 4-1 On March 2, 2020, VWX Co. received authorization to issue P6,000,000, 5-year bonds with interest of 12% per annum, payable every Mar. 2nd. The bonds were issued at 103.5% (net of bond issue cost) on the same date. The company will use the amortized cost method. REQUIRED: 1. Compute for the effective interest rate. Carry computations up to the three decimal places. 2. Prepare a premium amortization table. Carry computations to the nearest whole peso. 3. Prepare the 2020 entries including year-end adjustments (Dec. 31) and a compound closing entry.
Question 7 of 17 -/ 1 View Policies Current Attempt in Progress On January 1, Marigold Corp. issued $4200000, 9% bonds for $3895000. The market rate of interest for these bonds is 10%. Interest is payable annually on December 31. Marigold uses the effective-interest method of amortizing bond discount. At the end of the first year, Marigold should report unamortized bond discount of O $266050. O $282500. O $263000. O $293500. Save for Later Attempts: 0 of 1 used Submit Answer MacE
Problem 14-1A Calculating bond prices and recording issuance with journal entries LO3, 5, 6 Queen Energy Inc. Issued bonds on January 1, 2023, that pay interest semiannually on June 30 and December 31. The par value of the bonds is $340,000, the annual contract rate is 12%, and the bonds mature in 10 years. (Use IABLE 14A1 and IABLE 14A.2) (Use appropriate factor(s) from the tables provided.) Required: a. For each of these three situations, determine the issue price of the bonds. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.) (1) (2) (3) Market rate Issue Price of the interest Bonds 10% 12% 14% b. For each of these three situations, prepare the journal entry that would record the issuance, assuming the market interest rate at the date of issuance was (1) 10%, (2) 12%, (3) 14%. ( Use PV tables in determining the issue price of the bonds. Do not round intermediate calculations, Round the final answers to the nearest whole dollar.)
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How to calculate Pmt and FV
PROBLEM 1 On December 31, 2018, Edmand Inc. issued $750,000of 11% five-year bonds for $722,400, yielding an effective interest rate of 12%. Semi annual interest is payable on June 30 and December 31 each year. The firm uses effective interest method to amortize the discount. a) Prepare Amortization schedule showing the necessary information for the first two interest periods. Round amounts to the nearest dollar. b) Prepare the journal entry for the bond issuance on December 31, 2018. c) Prepare the journal entry to record bond interest expense and discount amortization at June 30 2019. d) Prepare the journal entry to record the bond interest expense and discount amortization at December 31, 2019
RCISES i S Exercise 14-17A (Algo) Computing bond interest and price; recording bond issuance LO C2 Brin Company issues bonds with a par value of $700,000. The bonds mature in 6 years and pay 6% annual interest in semiannual payments. The annual market rate for the bonds is 8%. (Table B.1 Table B.2, Table B.3, and Table B.4) Note: Use appropriate factor(s) from the tables provided. 1. Compute the price of the bonds as of their issue date. 2. Prepare the journal entry to record the bonds' issuance. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the price of the bonds as of their issue date. Note: Round all table values to 4 decimal places, and use the rounded table values in calculations. Round intermediate calculations to the nearest dollar amount. Table Values are Based on: Cash Flow Par (maturity) value Interest (annuity) Price of bonds n = i= Table Value Amount Required 1 Present Value $ Saved Required 2 > 0
Exercise 10-2 Straight-Line: Amortization of bond discount LO P2 Tano issues bonds with a par value of $99,000 on January 1, 2017. The bonds' annual contract rate is 6%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 8%, and the bonds are sold for $93,809. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over the life of these bonds? 3. Prepare an amortization table using the straight-line method to amortize the discount for these bonds. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the amount of the discount on these bonds at issuance? Discount
Exercise 10-3 (Algo) Recording bond issuance and interest LO P1 On January 1, Boston Enterprises Issues bonds that have a $1,600,000 par value, mature in 20 years, and pay 8% Interest semiannually on June 30 and December 31. The bonds are sold at par. 1. How much Interest will Boston pay (in cash) to the bondholders every six months? 2. Prepare Journal entries to record (a) the issuance of bonds on January 1, (b) the first interest payment on June 30, and (c) the second Interest payment on December 31. 3. Prepare the journal entry for Issuance assuming the bonds are issued at (a) 98 and (b) 102. Complete this question by entering your answers in the tabs below. Required 1 Required 2 How much interest will Boston pay (in cash) to the bondholders every six months? Semiannual Cash Interest Payment Par (maturity) Value Required 3 X Semiannual Rate Required 1 Required 2 >
Exercise 14-4 (Algo) Straight-Line: Amortization of bond discount LO P2 Tano Company issues bonds with a par value of $98,000 on January 1, 2021. The bonds' annual contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $90,537. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over the life of these bonds? 3. Prepare a straight-line amortization table for these bonds.

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