Present Value of Bonds Payable; PremiumMoss Co. issued $500,000 of four-year, 12% bonds, with interest payable semiannually, at a market (effective) interest rate of 11%.Determine the present value of the bonds payable, using the present value tables in Exhibit 5 and Exhibit 7. Round to the nearest dollar.504146 XFeedbackCheck My WorkRemember, the selling price of a bond is the sum of the present values of: the face amount of the bonds due at the maturity date and the periodic interest topaid on the bonds.The market rate of interest is used to compute the present value of both the face amount and the periodic interest.

Bonds payable is a type of instrument where by an amount is borrowed for a fixed period with fixed…

Answered: Moss Co. issued $500,000 of four-year,…

FINANCIAL ACCOUNTING

10th Edition

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Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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26. A company issued 10-year, 9% bonds with a par value of $500,000 when the market rate was 9.5%. The company received $484,087 in cash proceeds. Using the effective interest method, prepare the issuer's journal entry to record the first semiannual interest payment and the amortization of any bond discount or premium. (Round answers to the nearest dollar)
Beluga Inc. issued 10-year bonds with a face value of $150,000 and a stated rate of 3% when the market rate was 4%. Interest was paid annually. The bonds were sold at 87.5. A. What was the sales price of the bonds? B. Were they issued at a discount, a premium, or at par?
Ellis Company issues 6.5%, five-year bonds dated January 1, 2021, with a $250,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $255,333. The annual market rate is 6% on the issue 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.
Flint Corporation issues $430,000 of 9% bonds, due in 9 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%. Click here to view factor tables. Compute the issue price of the bonds. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places, e.g. 58,971.) Issue price of the bonds
2
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Sheffield Corporation issues $430,000 of 9% bonds, due in 10 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%. Click here to view factor tables. Compute the issue price of the bonds. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places, e.g. 58,971) Issue price of the bonds $
Monty Corp. invested in a three-year, $100 face value 9% bond, paying $95.11. At this price, the bond will yield a 11% return. Interest is payable annually. Prepare a bond discount amortization table for Monty Corp., assuming Monty uses the effective interest method required by IFRS. (Round answers to 2 decimal places, e.g. 52.75.) Bond Discount Amortization Table Date Cash Received Interest Income Bond Discount Amortization Amortized Cost of Bond Day 1 $enter a dollar amount End Year 1 $enter a dollar amount $enter a dollar amount $enter a dollar amount enter a dollar amount End Year 2 enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount End Year 3 enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount $enter a total amount $enter a total amount $enter a total amount Prepare journal entries to record the initial…
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On 10/1/X1, Openshaw, Inc issued $1,000,000 of bonds at a price of 98. Assuming the bonds have a 3-year term and bear interest at an annual stated rate of 6% payable semi-annually. What is the 12/31/X1 adjusting journal entry to record interest (using the straight line method?) а. Interest Expense $66,667 Interest Payable 60,000 Bond Premium 6,667 Interest Expense $16,667 Interest Payable 15,000 Bond Discount 1,667 C. Interest Expense $66,667 Interest Payable 60,000 Bond Discount 6,667 d. Interest Expense $16,667 Interest Payable 15,000 Bond Premium 1,667 d O O
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Moss Co. issued $500,000 of four-year, 12% bonds, with interest payable semiannually, at a market (effective) interest rate of 11%. Determine the present value of the bonds payable, using the present value tables in Exhibit 5 and Exhibit 7. Round to the nearest dollar. 504146 X