ncesQS 10-10 (Algo) Recording bond issuance and discount amortization LO P2Snap Company issues 10%, five-year bonds, on January 1 of this year, with a par value of $100,000 and semiannual interestpayments.Semiannual Period-End(0)January 1, issuance(1)June 30, first payment(2)December 31, second paymentUnamortized Discount$ 8,5007,6506,800Carrying Value$ 91,50092,35093,200Use the above bond amortization table and prepare journal entries to record (a) the issuance of bonds on January 1, (b) the firstinterest payment on June 30, and (c) the second interest payment on December 31.View transaction listJournal entry worksheet23Record the interest payment and amortization on June 30.Note: Enter debits before credits.DateGeneral JournalDebitCreditJune 30Bond interest expenseDiscount on bonds payable850CashRecord entryClear entryView general journal

Step 1:Required journal entries related to bonds are presented hereunder:No.Trans.DateGeneral…

Answered: nces QS 10-10 (Algo) Recording bond…

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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Question Content Area Oak Branch Inc. issued $860,000 of 7%, 10-year bonds when the market rate was 6%. They received $923,988. Interest was paid semi-annually. Prepare an amortization table for the first three years of the bonds. Round intermediate and final answers to whole dollar amount. Cash InterestPayment Interest onCarrying Value Amortization ofPremium Carrying Value Jan. 1, Year 1 $fill in the blank 1 June 30, Year 1 $fill in the blank 2 $fill in the blank 3 $fill in the blank 4 fill in the blank 5 Dec. 31, Year 1 fill in the blank 6 fill in the blank 7 fill in the blank 8 fill in the blank 9 June 30, Year 2 fill in the blank 10 fill in the blank 11 fill in the blank 12 fill in the blank 13 Dec. 31, Year 2 fill in the blank 14 fill in the blank 15 fill in the blank 16 fill in the blank 17 June 30, Year 3 fill in the blank 18 fill in the blank 19 fill in the blank 20 fill in the…
RCISES i S Exercise 14-17A (Algo) Computing bond interest and price; recording bond issuance LO C2 Brin Company issues bonds with a par value of $700,000. The bonds mature in 6 years and pay 6% annual interest in semiannual payments. The annual market rate for the bonds is 8%. (Table B.1 Table B.2, Table B.3, and Table B.4) Note: Use appropriate factor(s) from the tables provided. 1. Compute the price of the bonds as of their issue date. 2. Prepare the journal entry to record the bonds' issuance. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the price of the bonds as of their issue date. Note: Round all table values to 4 decimal places, and use the rounded table values in calculations. Round intermediate calculations to the nearest dollar amount. Table Values are Based on: Cash Flow Par (maturity) value Interest (annuity) Price of bonds n = i= Table Value Amount Required 1 Present Value $ Saved Required 2 > 0
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Question 16
Exercise 10-5 (Algo) Straight-Line: Recording bond issuance and discount amortization LO P2 Paulson Company issues 6%, four-year bonds, on January 1 of this year, with a par value of $90,000 and semiannual interest payments. Semiannual Period-End (0) January 1, issuance (1) June 30, first payment (2) December 31, second payment Unamortized Discount $ 6,533 5,716 4,899 Carrying Value $ 83,467 84,284 85,101 Use the above straight-line bond amortization table and prepare journal entries for the following. (a) The issuance of bonds on January 1. (b) The first interest payment on June 30. (c) The second interest payment on December 31. View transaction list Journal entry worksheet 1 2 3 Record the issuance of the bonds on January 1. Note: Enter debits before credits. Date January 01 General Journal Debit Credit
Exercise 14-5 (Algo) Straight-Line: Recording bond issuance and discount amortization LO P2 Paulson Company issues 8%, four-year bonds, on January 1 of this year, with a par value of $103,000 and semiannual interest payments. Semiannual Period-End (0) January 1, issuance (1) June 30, first payment (2) December 31, second payment Use the above straight-line bond amortization table and prepare journal entries for the following. Unamortized Discount $ 6,793 (a) The issuance of bonds on January 1. (b) The first interest payment on June 30. (c) The second interest payment on December 31. Carrying Value $ 96,207 97,056 97,905 5,944 5,095
Exercise 10-3 (Algo) Recording bond issuance and interest LO P1 On January 1, Boston Enterprises Issues bonds that have a $1,600,000 par value, mature in 20 years, and pay 8% Interest semiannually on June 30 and December 31. The bonds are sold at par. 1. How much Interest will Boston pay (in cash) to the bondholders every six months? 2. Prepare Journal entries to record (a) the issuance of bonds on January 1, (b) the first interest payment on June 30, and (c) the second Interest payment on December 31. 3. Prepare the journal entry for Issuance assuming the bonds are issued at (a) 98 and (b) 102. Complete this question by entering your answers in the tabs below. Required 1 Required 2 How much interest will Boston pay (in cash) to the bondholders every six months? Semiannual Cash Interest Payment Par (maturity) Value Required 3 X Semiannual Rate Required 1 Required 2 >
Exercise 14-4 (Algo) Straight-Line: Amortization of bond discount LO P2 Tano Company issues bonds with a par value of $98,000 on January 1, 2021. The bonds' annual contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $90,537. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over the life of these bonds? 3. Prepare a straight-line amortization table for these bonds.

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