How much will be the gain (loss) on sale assuming all the bonds were sold on June 30,2020 at 99 plus accrued interest?
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A: The answer is stated below:
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On January 1, 2018, LAB Co. acquired P4,000,000 of 12% face
P30,032
P38,684
(P40,000)
P60,819
answer not given
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- On June 30, 2020, Pearl Company issued $3,990,000 face value of 14%, 20-year bonds at $4,590,340, a yield of 12%. Pearluses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31. Provide the answers to the following questions. (1) What amount of interest expense is reported for 2021? (Round answer to 0 decimal places, e.g, 38,548.) Interest expense reported for 2021 $ (2) Will the bond interest expense reported in 2021 be the same as, greater than, or less than the amount that would be reported if the straight-line method of amortization were used? The bond interest expense reported in 2021 will be greater thane the amount that would be reported if the straight-line me (3) Determine the total cost of borrowing over the life of the bond. (Round answer to 0 decimal places, e.g. 38,548.) Total cost of borrowing over the life of the bondS (4) Will the total bond interest expense for the life of the bond be greater…Complex Solution Company issues P2 M face value, 9%, 10-year bonds payable on December 31, 2023. Interest is paid semi-annually each June 30 and December 31. The bonds were sold at a price of 98. Complex uses the straight-line method of amortizing bond discounts and premium. **Compute for Amount of Bond Premium or Discount on December 31, 2023. **Bond Interest Expense for 2024 with respect to these bonds **Carrying Value of the bonds as of December 31, 2024.Hernandez company issued $380,000, 7%, 10-year bonds on January 1, 2022, for $407,968. this price resulted in an effective-interest rate of 6% on the bonds. interest is payable annually on January 1. hernandex]z uses the effective-interest method to amortize bond premium or discount. prepare the journal entry to record the accrual interest and the premium amortization on December 31, 2022.
- Foreman Corporation issued P800, 000 of 10% 20 year bonds on January 1, 2019, at P102. Interest is payable semi annually on July 1 and January 1. Assume an effective yield of 9.7705% Prepare the journal entries to record the following:(a) The issuance of the bonds(b) The payment of interest and the related amortization on July 1, 2019(c) The accrual of interest and the related amortization on December 31, 2019.On January 1, 2019, Drennen Inc. issued $5 million face amount of 10-year, 14% stated rate bonds when market interest rates were 12%. The bonds pay semiannual interest each June 30 and December 31 and mature on December 31, 2028. Table 6-4, Table 6-5 (Use appropriate factor from the table provided.) Required:a. Calculate the proceeds (issue price) of Drennen Inc.'s bonds on January 1, 2019, assuming that the bonds were sold to provide a market rate of return to the investor. (Round PV factor to 4 decimal places.) b-1.Assume instead that the proceeds were $4,820,000. Use the horizontal model to record the payment of semiannual interest and the related discount amortization on June 30, 2019, assuming that the discount of $180,000 is amortized on a straight-line basis. Indicate the financial statement effect.(Enter decreases with a minus sign to indicate a negative financial statement effect.) b-2. Assume instead that the proceeds were $4,820,000. Record the journal entry to show the…On January 1, 2019, Ellison Co. issued 3-year, 10%, $200,000 face value bonds. The bonds were issued at 95.0827 , the interest payable semiannually on July 1 and January 1. The bonds were sold to yield 12%. On July 1, 2020 The company retire 60% of the bonds at 102. a) Complete the following table: Cash Paid Carrying amount of Interest Discount Date Expense Amortization bonds January 1, 2019 July 1, 2019 January 1, 2020 July 1, 2020 January 1, 2021 July 1, 2021 January 1, 2022 b) Journalize the required entries on the following dates January 1, 2019 July 1, 2019 December 31, 2019 – adjusting entry January 1, 2020 July 1, 2020 The payment of interest July 1, 2020 the retirement of 60% of the bonds at 102 December 31, 2020 – adjusting entry
- On January 1, 2024, White Water issues $490,000 of 8% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. The market interest rate on the issue date is 7% and the bonds issued at $535,061. Required: 1. Using an amortization schedule, show that the bonds have a carrying value of $529,343 on December 31, 2026. (Round your final answers to the nearest whole dollar.)On January 1, 2018, Rei Company obtained $4,000,000 of 12% face value bonds at $3,767,000 to be held financial assets at amortized cost with a 14% effective yield. Interest on bonds is payable annually on December 31 and bonds mature on January 1, 2022. The effective interest method of amortization is used. The quoted price of the bonds is as follows: December 31, 2018: 97 December 31, 2019: 98 June 30, 2020: 99.a. What amount will be recognized as income on the 2018 income statement?b. What amount will be the gain (loss) on sale assuming all the bonds were sold on June 30, 2020 at 99 plus accrued interest?c. How much is the carrying amount of investment on December 31, 2018?On January 1, 2017, Natifah Inc. acquires $500,000 of 8% bonds at a price of $552,970. The interest is payable each December 31, and the bonds mature December 31, 2037. The investment will provide Natifah Inc. a 7% yield. The bonds are classified as held-to-maturity. (2a) Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the effective-interest method. Date Cash Received Interest Revenue Amortization Carrying Amount (2b) Prepare the journal entry for the interest receipt of December 31, 2018, and the discount amortization under the effective interest method.
- A company issues P5,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2022. Interest is paid on June 30 and December 31. The proceeds from the bonds are P4,901,036. Using effective-interest amortization, what will the carrying value of the bonds be on the December 31, 2022 statement of financial position? a. 4903160 b. 4,903,160.00 c. 4903160 d. 4,903,160Ellis Company Issues 7.0%, five-year bonds dated January 1, 2019, with a $510,000 par value. The bonds pay Interest on June 30 and December 31 and are issued at a price of $531,755. The annual market rate is 6% on the Isue date. Required: 1. Compute the total bond Interest expense over the bonds' life. 2 Prepare an effective interest amortization table for the bonds' life. 3. Prepare the journal entries to record the first two Interest payments. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare an effective interest amortization table for the bonds' life. Semiannual Period- Cash Interest Bond Interest Paid Premium Amortization Unamortized Premium Carrying Value End Expense 01/01/2019 21,755 S 531,755 08/30/2019 17,850 12/31/2019 17,850 08/30/2020 12/31/2020 08/30/2021 12/31/2021 08/30/2022 12/31/2022 08/30/2023 12/31/2023 TotalOn January 1, 2019, Toni Corporation issued 3,000 of its 9%, P1,000 bonds when the prevailing market rate of interest was 8%. Interest is payable annually every January 1. The bonds mature on January 1, 2024. Toni paid a transaction cost of P24,460 in relation to the issuance of bonds and in effect the yield rate is 8.2%. Toni uses the effective method of amortization. Present value of 1 at 8.2% for 3 periods .78944 .79383 Present value of 1 at 8% for 3 periods Present value of annuity at 8.2% for 3 periods 2.56782 Present value of annuity at 8% for 3 periods 2.57710 38. On December 31, 2020 statement of financial position, how much would be shown as the carrying amount of the bonds payable? a. P3,022,181 b. P3,042,681 c. P3,061,631 d. P3,077,314 39. What is the balance of unamortized transaction cost or bond issue cost as of December 31, 2020? a. P5,598 b. P10,818 c. P15,676 d. P20,226
