**Instructions for Issuing Bonds and Amortizing Discount by Straight-Line Method****Instructions**On January 1, the first day of its fiscal year, Jacinto Company issued $23,100,000 of five-year, 9% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 10%, resulting in Jacinto Company receiving cash of $22,208,059.**Required:**a. Journalize the entries to record the following (refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.):1. Issuance of the bonds.2. First semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. *(Round your answer to the nearest dollar.)*3. Second semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. *(Round your answer to the nearest dollar.)* **Educational Content: Chart of Accounts****Overview of Jacinto Company's General Ledger**The Chart of Accounts is a comprehensive list that organizes the financial transactions of a business into categories. It is essential for efficient bookkeeping and financial reporting. Below is a segment from the general ledger of Jacinto Company, displaying the structure and categorization of various accounts.**Assets:**1. **110 Cash** - Represents the money available in bank accounts and on hand.2. **111 Petty Cash** - Small amount of cash kept for minor expenses.3. **121 Accounts Receivable** - Amounts due to Jacinto Company from customers.4. **122 Allowance for Doubtful Accounts** - Estimated uncollectible amounts from accounts receivable.5. **126 Interest Receivable** - Interest income that has been earned but not yet received.6. **127 Notes Receivable** - Written promises from others specifying payment of a specified amount.**Revenue:**7. **410 Sales** - Income from goods or services sold.8. **610 Interest Revenue** - Income earned from investments or savings accounts.9. **611 Gain on Redemption of Bonds** - Profit made from retiring bonds before their maturity date.**Expenses:**10. **510 Cost of Merchandise Sold** - Direct costs of producing goods sold by the company.11. **515 Credit Card Expense** - Costs associated with processing credit card transactions.This chart assists in recording and categorizing financial data, which is vital for preparing financial statements and managing business finances effectively.

Bonds payable is a form of liability for the business, on which regular interest payments needs to…

Answered: Instructions On January 1, the first…

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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Campbell, Inc. produces and sells outdoor equipment. On July 1, Year 1. Campbell issued $25,000,000 of 10-year, 10% bonds at a market (effective) interest rate of 9%, receiving cash of $26,625,925. 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.* 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 interest method. (Round to the nearest dollar.) b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the interest method. (Round to the nearest dollar.) 3. Determine the total interest expense for Year 1. *Refer to the Chart of Accounts for exact wording of account titles
On July 1, Year 1, Danzer Industries Inc. issued $37,400,000 of 10-year, 11% bonds at a market (effective) interest rate of 13%, receiving cash of $33,279,195. 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.* 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 discount, using the interest method. (Round to the nearest dollar.) b. The interest payment on June 30, Year 2, and the amortization of the bond discount, using the interest method. (Round to the nearest dollar.) 3. Determine the total interest expense for Year 1. *Refer to the Chart of Accounts for exact wording of account titles.
Campbell Inc. produces and sells outdoor equipment. On July 1, 20Y1, Campbell issued $30,000,000 of 10-year, 10% bonds at a market (effective) interest rate of 9%, receiving cash of $31,951,110. 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, 20Y1.* 2. Journalize the entries to record the following:* a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) b. The interest payment on June 30, 20Y2, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) 3. Determine the total interest expense for 20Y1. 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of…
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Instructions On January 1, the first day of the fiscal year, a company issues a $700,000, 5%, 10-year bond that pays semiannual interest of $17,500 ($700,000 x 5% x ½ year), receiving cash of $700,000. Journalize the entries to record (a) the issuance of the bonds, (b) the first interest payment on June 30, and (c) the payment of the principal on the maturity date December 31. Refer to the Chart of Accounts for exact wording of account titles. Journal 1 2 DATE DESCRIPTION JOURNAL POST. REF. DEBIT CREDIT
Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Chin Company issued $29,100,000 of five-year, 10% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 11%, resulting in Chin receiving cash of $28,003,265. a. Journalize the entries to record the following: Issuance of the bonds. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) If an amount box does not require an entry, leave it blank. b. Determine the amount of the bond interest expense for the first year.
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 expense for Year 1. 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is…
Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Chin Company issued $27,500,000 of five-year, 8% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 9%, resulting in Chin receiving cash of $26,412,067. a. Journalize the entries to record the following: 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) 3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) If an amount box does not require an entry, leave it blank. 1. Cash 26.412,067 Discount on Bonds Payable 1,087,933 Bonds Payable 27,500,000 2. Interest Expense Discount on Bonds Payable 120,881.44 X Cash 3. Interest Expense…
On July 1, 20Y1, Danzer Industries Inc. issued $43,200,000 of 10-year, 9% bonds at a market (effective) interest rate of 10%, receiving cash of $40,508,184. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1. 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the straight-line method. b. The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the straight-line method. 3. Determine the total interest expense for 20Y1. 4. Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest? 5. Compute the price of $40,508,184 received for the bonds by using the present value…
Campbell, Inc. produces and sells outdoor equipment. On July 1, Year 1, Campbell, Inc. issued $21,000,000 of 10-year, 8% bonds at a market (effective) interest rate of 7%, receiving cash of $22,492,386. 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.* 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 interest method. (Round to the nearest dollar.) b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the interest method. (Round to the nearest dollar.) 3. Determine the total interest expense for Year 1. *Refer to the Chart of Accounts for exact wording of account titles.
On the first day of its fiscal year, Chin Company issued $26,400,000 of five-year, 5% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 6%, resulting in Chin Company receiving cash of $25,273,908. a. Journalize the entries to record the following: Issuance of the bonds. First semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) Second semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) For a compound transaction, if an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar. 1. fill in the blank 6e9541070fd9028_2 fill in the blank…
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