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- A $300,000 bond was redeemed at 104 when the carrying amount of the bond was $316,000. The entry to record the redemption would include a Oa. loss on bond redemption of $3,000 Ob. gain on bond redemption of $3,000 Oc. loss on bond redemption of $4,000 Od. gain on bond redemption of $4,000 7 a I' B in 20 D W 14 Previous Next ^04) OPeriod Cash Paid Interest Expense Interest in Carrying Value Carrying Value Issue Date $85,940 1 $4,100 $ 3,438 $662 85,278 2 4,100 3,411 689 84,589 1. & 2. Record the bond issue assuming the face value of bonds payable is $79,000 and first interest payment. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) Record the bond issue. Event General Journal Debit Credit 1 Record the first interest payment. Event General Journal Debit Credit 2Exercise 9-21 (Static) Part 1 Required: 1-a. If the market rate is 8%, calculate the issue price. (EV of $1. PV of $1. EVA of $1, and PVA of $1) 1-b. Will the bonds issue at face amount, a discount, or a premium? Complete this question by entering your answers in the tabs below. Req 1a Req 1b If the market rate is 8%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Enter your answers in dollars not in millions (i.e., $5.5 million should be entered as 5,500,000). Round your final answers to the nearest whole dollar.) Bond Characteristics Amount $ 41,000,000 Face amount Interest payment Number of periods Market interest rate Issue price Ren 1a Rea 1b
- Sheridan Inc. is building a new hockey arena at a cost of $2,150,000. It received a down payment of $430,000 from local businesses to support the project, and now needs to borrow $1,720,000 to complete the project. It therefore decides to issue $1,720,000 of 10- year, 10.5% bonds. These bonds were issued on January 1, 2023, and pay interest annually on each January 1. The bonds yield 10.5% to the investor and have an effective interest rate to the issuer of 10.40530%. (There is an increased effective interest rate due to the capitalization of the bond issue costs.) Any additional funds that are needed to complete the project will be obtained from local businesses. Sheridan paid and capitalized $43,000 in bond issuance costs related to the bond issue. Sheridan prepares financial statements in accordance with IFRS.From page 9-3 of the VLN, what are the cash flows from a bond that must be present valued back to today? Group of answer choices A. The face amount only B. The interest payments only C. The issue price only D. The face amount and interest paymentsGiven the information below, which bond(s) will be issued at a premium? Bond 1 Bond 2 Bond 3 Bond 4 Stated Rate of Return 5% 10 % 15% 12% Market Rate of Return 5% 8% 12% 14% Bond 1. Bond 2. Bond 4. Bonds 2 and 3.
- Consider the relative liquidity of the following assets: Assets 1. A bond issued by a publicly traded company 2. The funds in a money market account 3. A $20 bill 4. Your truck Select the assets in order o Most Liquid Second-Most Liquid Third-Most Liquid Least Liquid Bond 520.00 bill Truck Funds held in a money market account quid.On January 1, 2021, Shay Company issues $290,000 of 11%, 20-year bonds. The bonds sell for $282,750. Six years later, on January 1, 2027, Shay retires these bonds by buying them on the open market for $303,050. All interest is accounted for and paid through December 31, 2026, the day before the purchase. The straight-line method is used to amortize any bond discount. 1. What is the amount of the discount on the bonds at issuance? 2. How much amortization of the discount is recorded on the bonds for the entire period from January 1, 2021, through December 31, 2026? 3. What is the carrying (book) value of the bonds as of the close of business on December 31, 2026? 4. Prepare the journal entry to record the bond retirement. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 1. What is the amount of the discount on the bonds at issuance? 2. How much amortization of the discount is recorded on the bonds for the entire period from January 1, 2021,…Q23 You are considering an investment in 30 year bond issued by Toy Company. The bonds have no special covenants and the 1 yr T bills are currently earning 5.75% The following information is available: Real risk free rate = 2.5% Default Risk Premium = 1.5% Liquidity risk premium = 0.50% Maturity Risk Premium = 2.00% What is the fair interestrate for the toy company bonds?
- If the bonds payable account has a balance of $900,000 and the discount on bonds payable account has a balance of $72,000, what is the carrying amount of bonds? A. $828,000 B. $900,000 C. $972,000 D. $580,00011. Under the straight-line amortization method, interest expense on a bond sold at a premium is equal to the a. interest paid plus bond premium amortizationb. interest rate times the book value of the bondsc. interest rate times the face value of the bondsd. interest paid minus bond premium amortizationInstructions Present Value Tables Chart of Accounts Journal Final Questions Instructions Campbell Inc. produces and sells outdoor equipment. On July 1, Year 1, Campbell Inc. issued $60,400,000 of 10-year, 12% bonds at a market (effective) interest rate of 11%, receiving cash of $64,009,069. 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…