General Corporation purchased $938,000 of bonds with a coupon rate of 10% at face value on December 5, 2021. The market pri the bond was $984,000 on December 31, 2021. Required: Prepare the appropriate journal entry on December 31, 2021, to properly value the bonds assuming the bonds are classified as: (If entry is required for a transaction/event, select "No journal entry required" in the first account field.) Ignore the journal entry for coupon payment and interest recognition. 1. Trading securities. 2. Securities available-for-sale. 3. Held-to-maturity securities. View transaction list Journal entry worksheet 1. 3 <> Record the unrealized holding gain or loss for securities avallable-for-sale. Note: Enter debits before credits Transaction General Joumal Debit Credit 21 < Prev 13 of 16 E Next >

General Corporation purchased $938,000 of bonds with a coupon rate of 10% at face value on December 5, 2021. The market pri the bond was $984,000 on December 31, 2021. Required: Prepare the appropriate journal entry on December 31, 2021, to properly value the bonds assuming the bonds are classified as: (If entry is required for a transaction/event, select "No journal entry required" in the first account field.) Ignore the journal entry for coupon payment and interest recognition. 1. Trading securities. 2. Securities available-for-sale. 3. Held-to-maturity securities. View transaction list Journal entry worksheet 1. 3 <> Record the unrealized holding gain or loss for securities avallable-for-sale. Note: Enter debits before credits Transaction General Joumal Debit Credit 21 < Prev 13 of 16 E Next >

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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Hiu Wang Company sold $55,000,000, 8%, 10-year bonds on January 1, 2020. The bonds apply interest on July 1 and January 1. HWC uses the straight-line method to amortize bond premium or discount. Assume no interest accrued on June 30. Prepare all the necessary journal entries to record the issuance of the bonds and bond interest happens for 2020, assuming that the bonds sold at 105. Prepare journal entries as in part (1) assuming that the bond sold at 98. Show statement of financial position presentation for each bond issued at December 31, 2020.
The balance sheet of Indian River Electronics Corporation as of December 31, 2020, included 13.25% bonds having a face amount of $90.4 million. The bonds had been issued in 2013 and had a remaining discount of $3.4 million at December 31, 2020. On January 1, 2021, Indian River Electronics called the bonds before their scheduled maturity at the call price of 104. Required: Prepare the journal entry by Indian River Electronics to record the redemption of the bonds at January 1, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet
On January 1, 2021, Darnell Window and Pane issued $18 million of 10 year, zero-coupon bonds for $5,795,518.Required:1. Prepare the journal entry to record the bond issue.2. Determine the effective rate of interest.3. Prepare the journal entry to record annual interest expense at December 31, 2021.4. Prepare the journal entry to record annual interest expense at December 31, 2022.5. Prepare the journal entry to record the extinguishment at maturity.
On January 1, 2021, Laura Company purchased $930,000 of 10% bonds at face value. Interest is payable once a year on January 1. The bond market value was $980,000 on December 31, 2021. There was no balance in the fair value adjustment account.Required:Prepare the appropriate journal entries for 2021 assuming the bonds are classified as:1. Trading securities.2. Available for sale securities.3. Held to maturity securities.
The balance sheet of Indian River Electronics Corporation as of December 31, 2020, included 12.25% bonds having a face amount of $90 million. The bonds had been issued in 2013 and had a remaining discount of $3 million at December 31, 2020. On January 1, 2021, Indian River Electronics called the bonds before their scheduled maturity at the call price of 102.Required:Prepare the journal entry by Indian River Electronics to record the redemption of the bonds at January 1, 2021.
The balance sheet for Pina Colada Consulting reports the following information on July 1, 2022. Long-term liabilities Bonds payable Less: Discount on bonds payable $1,280,000 51,200 $1,228,800 Pina Colada decides to redeem these bonds at 105 after paying annual interest. Prepare the journal entry to record the redemption on July 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
2. On January 1, 2020, Dawson Inc. issued bonds with a face value of $400,000 and coupon interest rate of 5%. The bonds pay interest semi-annually on July 1 and January 1. The market rate at January 1, 2020 is 4%. (a) Are the bonds being issued at a premium or a discount? (b) Prepare the journal entry for the issue, assuming the bonds are issued at 101.4. (No explanation required.) (c) Record the entry for the first interest payment at July 1, 2020. (No explanation required.)
ony Hawk's Adventure (THA) issued callable bonds on January 1, 2021. THA's accountant has projected the following amortization schedule from issuance until maturity: Date cash paid Interest Expense Increase in carrying value carrying value 01/01/2021 $218,690 06/30/2021 $11,500 $13,121 $1,621 220,311 12/31/2021 11,500 13,219 1,719 222,030 06/30/2022 11,500 13,322 1,822 223,852 12/31/2022 11,500 13,431 1,931 225,783 06/30/2023 11,500 13,547 2,047 227,830 12/31/2023 11,500 13,670 2,170 230,000 THA issued the bonds for: Multiple Choice $230,000. $218,690. $299,000. Cannot be determined from the given information.
Please Explain Proper Step by Step and do not give solution in image format ??
Lopez Plastics Co. (LPC) issued callable bonds on January 1, 2021. LPC's accountant has projected the following amortizatic schedule from issuance until maturity: Cash Effective Decrease in Date Outstanding interest interest balance balance 1/1/2021 24 207,020 6/30/2021 2$ 7,000 $4 6,211 24 789 206,230 12/31/2021 7,000 6,187 813 205,417 6/30/2022 7,000 6,163 837 204,580 12/31/2022 7,000 6,137 863 203,717 6/30/2023 7,000 6,112 888 202,829 12/31/2023 7,000 6,085 915 201,913 943 200,971 6/30/2024 7,000 6,057 971 200,000 7,000 6,029 12/31/2024 LPC issued the bonds:
Crane Company issued $1,730,000 of bonds on January 1, 2022. (a) Prepare the journal entry to record the issuance of the bonds if they are issued at (1) 100, (2) 97, and (3) 105. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation (1) (2) (3) Debit Credit
Pharoah Corporation issued $5180000 of bonds at face value on January 1, 2024. Pharoah chose the fair value option for these bonds. At Decmber 31, 2024, the value of the bonds is now $4662000 because the market interest rates have increased. The entry on Pharoah's books would include: No entry would be made; a credit to Premium on Bond Payable at $518000; a debit to Bonds Payable of $518000; a debit to Unrealized Holding Gain of $518000