Instructions Chart of Accounts AnalysisGeneral JournalPresent Value TablesInstructionsBarnett Industries, Inc., issued $600,000 of 8% bonds on January 1, Year 1. The bonds pay interest semiannually on July 1 and January 1. The maturity date on these bonds isDecember 31, Year 10. The firm uses the effective interest method of amortizing discounts and premiums. The bonds were sold to yield an effective interest rate of 9%. Barnett incurredlegal and investment banking fees of $22,000 in issuing the bonds and amortizes these costs annually on a straight-line basis.Required:1. Calculate the selling price of the bonds.2. Prepare journal entries for the issuance of the bonds and debt issuance costs.AnalysisShaded cells have feedback.1. Calculate the selling price of the bonds.General Journal12DATEJan. 1CashACCOUNT TITLEDiscount on Bonds Payable3Bonds Payable4Deferred Debt Issuance Costs5CashGENERAL JOURNALAdditional InstructionShaded$578,000.00 XPOST. REF.DEBIT✓✓✓514,403.40600,000.0022,000.0022,000.00Points:10.1/12

The objective of the question is to calculate the selling price of the bonds and prepare the journal…

Answered: Instructions Chart of Accounts Analysis…

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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Bond Premium, Entries for Bonds Payable Transactions Instructions Present Value Tables Chart of Accounts Journal Final Questions Instructions O'Halloran Inc. produces and sells outdoor equipment. On July 1, Year 1, O'Halloran Inc. issued $32,000,000 of six-year, 8% bonds at a market (effective) interest rate of 7%, receiving cash of $33,546,022. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1.* 2. Journalize the entries to record the following:* a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar. b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar. 3. Determine the total interest…
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