On April 1, 2000, a $150,000, ten-year, 12% bond was sold to yield 14% plusaccrued interest. The bond was dated January 1, 2000, and interest is paid eachJanuary 1 and July 1. Present value data follow:PV of10 periods6%0.5583957%0.50834912%0.32197314%0.269744$120 periods0.3118050.2584190.1486440.1036674400PV of an Annuity10 periods7.3600877.0235825.6502235.21611620 periods11.46992110.5940147.4694446.623131Required:1.Compute the amount of cash received from the sale of the bond.2. Prepare the journal entry to record the sale.

The objective of this question is to calculate the amount of cash received from the sale of the bond…

Answered: On April 1, 2000, a $150,000, ten-year,…

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 of this year, Ikuta Company issued a bond with a face value of $115,000 and a coupon rate of 4 percent. The bond matures in 3 years and pays interest every December 31. When the bond was issued, the annual market rate of interest was 5 percent. Ikuta uses the effective-interest amortization method. (FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required: 1. Complete a bond amortization schedule for all three years of the bond's life. 2. What amounts will be reported on the income statement and balance sheet at the end of Year 1 and Year 2? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete a bond amortization schedule for all three years of the bond's life. Note: Round your intermediate calculations and final answers to whole dollars. Date January 01, Year 1 December 31, Year 1 December 31, Year 2 December 31, Year 3 Cash Interest Interest Expense Amortization Book…

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