For ABC Co. answer the following independent requirements: a. Prepare the necessary journal entry on July 1, 2018. b. Assume that the accounting date for ABC Co. is December 31, prepare ecessary journal entry on December 31, 2018. C. Assume that the bond was issued on September 30, 2018, prepare the journal entry on January 01, 2019.

For ABC Co. answer the following independent requirements: a. Prepare the necessary journal entry on July 1, 2018. b. Assume that the accounting date for ABC Co. is December 31, prepare ecessary journal entry on December 31, 2018. C. Assume that the bond was issued on September 30, 2018, prepare the journal entry on January 01, 2019.

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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On January 1, 2024, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: Payment Cash Payment Effective Interest Increase in Balance Outstanding Balance 6,221,759 1 356,000 373,306 17,306 6,239,065 2 356,000 374,344 18,344 6,257,409 3 356,000 375,445 19,445 6,276,854 4 356,000 376,611 20,611 6,297,465 5 356,000 377,848 21,848 6,319,313 6 356,000 379,159 23,159 6,342,472 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 38 356,000 505,452 149,452 8,573,656 39 356,000 514,419 158,419 8,732,075 40 356,000 523,925 167,925 8,900,000 Required: What is the face amount of the bonds? What is the initial selling price of the bonds? What is the term to maturity in years? Interest is determined by what approach? What is the stated annual interest rate? What is the effective annual interest rate? What is the total cash interest paid over the term to maturity? What is the total effective…
Please answer following true or false with explanation i am providing 3 subparts (A) A bond was issued at a discount on January 1, 2022. The company uses the effective interest method of amortization. The amount of the discount amortized will continuously increase over the life of the bond. (True/False) (B) A bond was issued on June 1, 2021. The interest dates of the bond are February 1 and August 1. The total interest expense for the year ended December 31, 2021 will exceed the interest paid during 2021. (True/False) (C) The condition for bond issued at a premium is that the market rate is greater than the yield. (True/False)
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