Hillside issues $1,700,000 of 8%, 15-year bonds dated January 1, 2021, that pay interest semiannually on June 30 andDecember 31.The bonds are issued at a price of $1,468,990.Required:1. Prepare the January 1 journal entry to record the bonds' issuance.2(a) For each semiannual period, complete the table below to calculate the cash payment.2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization.2(c) For each semiannual period, complete the table below to calculate the bond interest expense.3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.4. Prepare the first two years of a straight-line amortization table.5. Prepare the journal entries to record the first two interest payments.Complete this question by entering your answers in the tabs below.Req 1Req 2A to 2CReq 3Req 4Req 5Prepare the January 1 journal entry to record the bonds' issuance.

Bonds payable arise when a company issues bonds to investors to borrow money to meet any business…

Answered: Hillside issues $1,700,000 of 8%,…

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, 2020, Cullumber Company issued $400,000, 10%, 10-year bonds at face value. Interest is payable annually on January 1.(a) Prepare the journal entry to record the issuance of the bonds. Date Account Titles and Explanation Debit Credit Jan. 1 (b) Prepare the journal entry to record the accrual of interest on December 31, 2020. Date Account Titles and Explanation Debit Credit Dec. 31 (c) Prepare the journal entry to record the payment of interest on January 1, 2021. Date Account Titles and Explanation Debit Credit Jan. 1
Xonic Corporation issued $7.5 million of 20-year, 8 percent bonds on April 1, 2021, at 102. Interest is paid on March 31 and September 30 of each year, and all of the bonds in the issue mature on March 31, 2041. Xonic’s fiscal year ends on December 31. Prepare the following journal entries. a. April 1, 2021, to record the issuance of the bonds. b. September 30, 2021, to pay interest and to amortize the bond premium. c. March 31, 2041, to pay interest, amortize the bond premium, and retire the bonds at maturity (make two separate entries). Assume an adjusting entry was made on December 31, 2040, to recognize interest from October 1 to December 31. d. What is the effect of amortizing the bond premium on (1) annual net income and (2) annual net cash flow from operating activities. (Ignore possible income tax effects.
Legacy issues $740,000 of 7.5%, four-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31. They are issued at $680,186 when the market rate is 10%. 4. Prepare the journal entries to record the first two interest payments.
Volunteer Inc. issued bonds with a $650,000 face value, 12% interest rate, and a 4-year term on July 1, 2018 and received $700,000. Interest is payable annually. The premium is amortized using the straight-line method. A. July 1, 2018: entry to record issuing the bonds B. June 30, 2019: entry to record payment of interest to bondholders C. June 30, 2019: entry to record amortization of premium D. June 30, 2020: entry to record payment of interest to bondholders E. June 30, 2020: entry to record amortization of premium Prepare journal entries for the above transactions. If an amount box does not require an entry, leave it blank. A. July 1, 2018 Cash Bonds Payable Premium on Bonds Payable B. June 30, 2019 Interest Expense Cash C. June 30, 2019 Premium on Bonds Payable Interest Expense D. June 30, 2020 Interest Expense Cash E. June 30, 2020 Premium on Bonds Payable Interest Expense
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[The following information applies to the questions displayed below.] Hillside issues $4,000,000 of 6%, 15-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,456,448. Required: 1. Prepare the January 1 journal entry to record the bonds' issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization. 2(c) For each semiannual period, complete the table below to calculate the bond interest expense. 3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 4. Prepare the first two years of a straight-line amortization table. 5. Prepare the journal entries to record the first two interest payments. Complete this question by entering your answers in the tabs below. Req 1 Req 2A to 2C Req 3 Req 4 Req 5 Prepare the…
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On July 1, 2018, ABC Co. issued $6,000,000, 6%, 4-year bonds. The bonds were sold to yield an effective-interest rate of 8%. Interest is paid semiannually on July 1 and January 01. The company uses the effective-interest method of amortization. Required: For ABC Co. answer the following independent requirements: JORARE STON a. Prepare the necessary journal entry on July 1, 2018. b. Assume that the accounting date for ABC Co. is December 31, prepare journal entry on December 31, 2018. cessary c. Assume that the bond was issued on September 30, 2018, prepare the journal entry on January 01, 2019. d. Assume that the accounting date for ABC Corporation is November 30, prepare the journal entry on November 30, 2018.
On the first day of the fiscal year, a company issues an $314,000, 6%, 5-year bond that pays semiannual interest of $9,420 ($314,000 x 6% x 1/2), receiving cash of $295,200. Journalize the entry to record the first interest payment and the amortization of the related bond discount using the straight-line method. If an amount box does not require an entry, leave it blank.

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