On April 1, 2020 , Quicke Mart issued $1,000,000, 9% bonds at par plus accrued interest dated January 1, 2020. Interest is payable semi-annually on January 1 and July 1. The bonds mature on January 1, 2027. Required: Prepare journal entries to record the following transactions related to long-term bonds of Quicke Mart: 1. The issuance of the bonds. 2. The first interest payments.

On April 1, 2020 , Quicke Mart issued $1,000,000, 9% bonds at par plus accrued interest dated January 1, 2020. Interest is payable semi-annually on January 1 and July 1. The bonds mature on January 1, 2027. Required: Prepare journal entries to record the following transactions related to long-term bonds of Quicke Mart: 1. The issuance of the bonds. 2. The first interest payments.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On June 30, 2021, Highland Co. issued $600,000, 8% bonds, due to mature on June 30, 2026. Interest is paid semi-annually on December 31 and June 30. Similar bonds at the time of sale were being traded at a market rate of 7%. Required: Calculate the value of the bond at the time of issuance, and record the initial journal entry. Assuming that Highland has a June 30 year end, provide any additional required entries (other than in part a) until June 30, 2022.
Moore Inc. issued bonds with a $500,000 face value, 8% interest rate, and a 4-year term on July 1, 2020 and received $475,000. Interest is payable annually. The discount is amortized using the straight-line method. Prepare journal entries for the following transactions. A. July 1, 2020: entry to record issuing the bonds. B. June 30, 2021: entry to record payment of interest to bondholders. C. June 30, 2021: entry to record amortization of discount. D. June 30, 2022: entry to record payment of interest to bondholders. E. June 30, 2023: entry to record amortization of discount.
On January 1, 2021, Bradley Recreational Products issued $100,000, 9%, four year bonds. Interest is paid semiannually on June 30 and December 31. The market yield for bond of similar risk and maturity is 7%. The fiscal year for the firm ends on December 31. A. Determine the price of the bonds issued on January 1. B. Prepare the amortization schedule for the bonds using the effective interest rate method. C. Prepare the journal entries to record: • Issuing bonds on January 1 • Paying interest on June 30, 2021 • Paying interest on Dec 31, 2021 • Repayment of the bonds on December 31, 2025.
The following section is taken from Crane's balance sheet at December 31, 2024. Current liabilities Interest payable Long-term liabilities Bonds payable (9%, due January 1, 2028) (a) (b) $41,000 Interest is payable annually on January 1. The bonds are callable on any annual interest date. (c) 510,000 Journalize the payment of the bond interest on January 1, 2025. Assume that on January 1, 2025, after paying interest, Crane calls bonds having a face value of $105,000. The call price is 105. Record the redemption of the bonds. Prepare the adjusting entry on December 31, 2025, to accrue the interest on the remaining bonds.
Haley Inc. issued $350,000, 8% bonds on August 1, 2021. Interest is payable semi-annually on February 1 and August 1. The bonds mature on August 1, 2025. At the time of issuance, similar bonds were trading at 9%. Haley Inc. has a year-end of December 31. Required: Create a bond amortization schedule for the term of the bond. Round amounts to the nearest dollar. Prepare all required journal entries for 2021 and 2022 (including the issuance of the bonds). Round all amounts to the nearest dollar.
On June 30, 2020, the market interest rate is 7%. Moreau Enterprises issues $500,000 of 8%, 19-year bonds at 110.625. The bonds pay interest on June 30 and December 31. Moreau amortizes bonds by the effective-interest method Requirements 1. Prepare a bond amortization table for the first four semi-annual interest periods. 2. Record issuance of the bonds on June 30, 2020, the payment of interest at December 31, 2020, and the semi-annual interest payment on June 30, 2021. Requirement 1. Prepare a bond amortization table for the first four semi-annual interest periods (Round your answers to the nearest whole dollar.) Moreau Enterprises Amortization Table Semi-Annual Interest Date June 30, 2020 Dec. 31, 2020 June 30, 2021 Dec. 31, 2021 June 30, 2022 A Interest Payment (4% of Maturity Value) B Interest Expense (3.5% of Preceding Bond Carrying Amount) C Premium Amortization (A-B) D E Premium Account Bond Carrying Amount Balance (D-C) ($500,000 + D)
prepare the appropriate journal entry for the redemption or conversion of the bonds. Pharoah Company redeemed $155,000 face value, 17% bonds on June 30, 2020, at 96. The carrying value of the bonds at the redemption date was $158,000. The bonds pay annual interest, and the interest payment due on June 30, 2020, has been made and recorded.
(b) Prepare an effective-interest amortization table for the first eight interest payments for these bonds. (c) The Bonds were redeemed on January 1, 2026 (after the interest had been paid and recorded) at 102. Prepare the journal entry for the redemption of the bonds.
An accounting example: Otter Products inc issued bonds on January 1, 2019. Interest to be paid semi-annually. Term in years is 2; Face value of bonds issued is $200,000; Issue Price $206,000; Specified Interest Rate each payment period is 6% Question. Calculate a. the amount of interest paid in cash every payment period. b. The amount of amortization to be recorded at each interest payment date (use straight-line method) c. complete amoritzation table by calculating interest expense and beginning and ending bond carrying amounts at the each period over 2 years. The term is for 2 years however 3 years is showing on the workbook. How do I calcuate the 3rd year if the problem only says the term is 2 years?
On January 1, 2018, Educators Credit Union issued 7%, 20-year bonds payable with a face value of $100,000. The bonds pay interest on June 30 and December 31. How do I Journalize the payment of interest and amortization on June 30, 2018.?
On January 1, 2022, Ivanhoe Company issued $322,500, 7%, 5-year bonds at face value. Interest is payable annually on January 1. (a) Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Jan. 1, 2022 Account Titles and Explanation Debit I Credit
Riverbed Company issued $2,690,000, 9%, 20-year bonds on January 1, 2020, at 105. Interest is payable annually on January 1. Riverbed uses straight-line amortization for bond premium or discount. Prepare the journal entries to record the following events. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) (a) The issuance of the bonds. (b) The accrual of interest and the premium amortization on December 31, 2020. (c) The payment of interest on January 1, 2021. (d) The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. Date Account Titles and Explanation Debit Credit > >