Answered: journal entries

Business

Accounting

journal entries

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, 2018, Paradiso Company issued 1,000 of its 8%, $1,000 bonds at 93. Interest is payable semiannually on June 30 and December 31. The bonds will mature on December 31, 2027. If the company uses straight-line amortization, determine the amount of interest expense for 2018. answer is 87,000 how do you get there?
Prepare all journal entries and adjusting journal entries necessary to record the information below for 2022: Red Robin holds corporate bonds with a face value of $218,500. It purchased these bonds on January 1 of the prior year (2021). The stated rate of the bonds is 4.85 %, but they were purchased at an effective rate of 7%. The bonds are 5-year bonds and pay interest on December 31 every year. Red Robin correctly classifies this investment as available for sale. This is the only AFS debt investment that Red Robin has ever had. The fair value of the bond on December 31 of the current year is $224,900.
On the first day of the fiscal year, a company issues a $674,000, 7%, 10-year bond that pays semiannual interest of $23,590 ($674,000 x 7% x 1/2), receiving cash of $707,700. Journalize the entry for the first interest payment and amortization of premium using the straight-line method. If an amount box does not require an entry, leave it blank.
On the first day of the fiscal year, a company issues a $957,000, 7%, 10-year bond that pays semiannual interest of $33,495 ($957,000 x 7% x 1/2), receiving cash of $1,004,900. Journalize the entry to record the first interest payment and amortization of premium using the straight-line method. If an amount box does not require an entry, leave it blank
On the first day of the fiscal year, a company issues a $896,000, 7%, 10-year bond that pays semiannual interest of $31,360 ($896,000 x 7% x 1/2), receiving cash of $940,800. Journalize the entry for the first interest payment and amortization of premium using the straight-line method. If an amount box does not require an entry, leave it blank.
Patricia Johnson Company issued $420,000 of 10%, 20-year bonds on January 1, 2025, at 102. Interest is payable semiannually on July 1 and January 1. Johnson Company uses the straight-line method of amortization for bond premium or discount. Prepare the journal entries to record the following. (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) a. b. с The issuance of the bonds. The payment of interest and the related amortization on July 1, 2025. The accrual of interest and the related amortization on December 31, 2025. Date Account Titles and Explanation Debit 1000 Credit
On July 1, 2019, Cyclic Inc issued $1,000,000 in principal of 6% bonds due in July 2024. The bond pays interest quarterly on January 2, April 1, July 1, and October 1. On July 1, 2020, immediately following an interest payment. Epimetheus Bank purchased $5000 in face value of these bonds for $4501. Epimetheus Bank intends to trade this bond as part of its business operations. When Epimetheus Bank purchased the bond, it calculated that the historical market rate was 9%. When Epimetheus Bank received the interest payment on October 1,2020, what were the journal entries? Select all that apply. Cr. Interest revenue $75 Dr. Amortization of discount on trading debt $26 Cr. Interest revenue $101 Dr Cash $75 Dr Cash $101 Cr. Trading debt receivable $26
Prepare journal entries to record the following transactions relating to long-term bonds of Lancaster Inc. Show calculations and round to the nearest dollar. a) On June 1, 2023, Lancaster Inc. issued $400,000, 6% bonds for $391,760, including accrued interest. The bonds were dated February 1, 2023, and interest is payable semi-annually on February 1 and August 1 with the bonds maturing on February 1, 2033. The bonds are callable at 102. b) On August 1, 2023, Lancaster paid the semi-annual interest and recorded the amortization of the discount or premium, using straight-line amortization. c) On February 1, 2025, Lancaster paid the semi-annual interest and recorded amortization of the discount or premium. Assume that a reversing entry was made on January 1, 2025. d) The company then purchased $240,000 of the bonds at the call price Do not give…
On January 1, 2021, Dominguez Company issues 7-year bonds with a face value of $10,000,000 and a stated annual interest rate of 4%. The bonds pay interest semiannually on June 30 and December 31. The market rate of interest is 5%, and the company receives cash proceeds of $9,415,454 when the bonds are issued. a) Provide the journal entry that Dominguez will make to record the second bond interest payment on December 31, 2021. b) Provide the journal entry that Dominguez will make to record the principal payment of $10,000,000 on December 31, 2030.
Spurrier Corp. has 10-year bonds with a face value of $400,000 and a carrying value of $420,345 as of 12/31/19. On June 30, 2020, they pay their bondholders $12,000 and recognize $10,509 in interest expense. Please provide the June 30, 2019 carrying value of the bonds after the interest payment.
Greener Pastures Corporation borrowed $1,950,000 on November 1, 2021. The note carried a 9 percent interest rate with the principal and interest payable on June 1, 2022. (a) The note issued on November 1. (b) The interest accrual on December 31. Indicate the effects of the amounts for the above transactions.
On May 1, 2018, Green Corporation issued $1,100,000 of 12% bonds, dated January 1, 2018, for $1,074,000 plus accrued interest. The bonds mature on December 31, 2032, and pay interest semiannually on June 30 and December 31. Green's fiscal year ends on December 31 each year. Required: 1. Determine the amount of accrued interest that was included in the proceeds received from the bond sale. 2. Prepare the journal entry for the issuance of the bonds. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the amount of accrued interest that was included in the proceeds received from the bond sale. Accrued interest