On April 1, 2021, Western Communications, Inc., issued 12% bonds, dated March 1, 2021,with face amount of $44 million. The bonds sold for $43.3 million and mature on February28, 2024. Interest is paid semiannually on August 31 and February 28. StillworthCorporation acquired $44,000 of the bonds as a long-term investment. The fiscal years ofboth firms end December 31, and both firms use the straight-line method.Required: 1. Prepare the journal entries to record (a) issuance of the bonds by Western and(b) Stillworth's investment on April 1, 2021.2. Prepare the journal entries by both firms to record all subsequent events related to thebonds through maturity.

DETAILED ANALYSISQuestion 1a) Issuance of the bonds by WesternExplanation:The journal entry to…

Answered: On April 1, 2021, Western…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 16E

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Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market rate of 4%. The bonds paid interest semi-annually on June 30 and Dec. 31. How much money did the company receive when the bonds were issued? The bonds would be quoted at what rate?
Aggies Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018, and received $540,000. Interest is payable semi-annually. The premium is amortized using the straight-line method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. Dec. 31, 2018: entry to record payment of interest to bondholders C. Dec. 31, 2018: entry to record amortization of premium
Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the market of interest was 9%. The company uses the effective-interest method of amortization. At the end of the year, the company will record ________. A. a credit to cash for $28,733 B. a debit to interest expense for $31,267 C. a debit to Discount on Bonds Payable for $1,267 D. a debit to Premium on Bonds Payable for $1.267
On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?
Saverin, Inc. produces and sells outdoor equipment. On July 1, 2016, Saverin, Inc. issued 62,500,000 of 10-year, 9% bonds at a market (effective) interest rate of 8%, receiving cash of 66,747,178. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Instructions 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds. 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 2016, and the amortization of the bond premium, using the interest method. (Round to the nearest dollar.) b. The interest payment on June 30, 2017, and the amortization of the bond premium, using the interest method. (Round to the nearest dollar.) 3. Determine the total interest expense for 2016.
Diana Inc. issued $100,000 of its 9%, 5-year bonds for $96,149 when the market rate was 10%. The bonds pay interest semi-annually. Prepare an amortization table for the first three payments.
Naval Inc. issued $200,000 face value bonds at a discount and received $190,000. At the end of 2018, the balance in the Discount on Bonds Payable account is $5,000. This years balance sheet will show a net liability of ________. A. $200,000 B. $180,000 C. $195,000 D. $205,000
On April 1, 2021, Western Communications, Inc., issued 12% bonds, dated March 1, 2021, with face amount of $37 million. The bonds sold for $36.3 million and mature on February 28, 2024. Interest is paid semiannually on August 31 and February 28. Stillworth Corporation acquired $37,000 of the bonds as a long-term investment. The fiscal years of both firms end December 31, and both firms use the straight-line method. Required: 1. Prepare the journal entries to record (a) issuance of the bonds by Western and (b) Stillworth's investment on April 1, 2021. 2. Prepare the journal entries by both firms to record all subsequent events related to the bonds through maturity.
On April 1, 2021, Western Communications, Inc., issued 12% bonds, dated March 1, 2021, with face amount of $37 million. The bonds sold for $36.3 million and mature on February 28, 2024. Interest is paid semiannually on August 31 and February 28. Stillworth Corporation acquired $37,000 of the bonds as a long-term investment. The fiscal years of both firms end December 31, and both firms use the straight-line method.Required:1. Prepare the journal entries to record (a) issuance of the bonds by Western and (b) Stillworth’s investment on April 1, 2021.2. Prepare the journal entries by both firms to record all subsequent events related to the bonds through maturity.
On April 1, 2021, Western Communications, Inc., issued 12% bonds, dated March 1, 2021, with face amount of $31 million. The bonds sold for $30.3 million and mature on February 28, 2024. Interest is paid semiannually on August 31 and February 28. Stillworth Corporation acquired $31,000 of the bonds as a long-term investment. The fiscal years of both firms end December 31, and both firms use the straight-line method. Required:1. Prepare the journal entries to record (a) issuance of the bonds by Western and (b) Stillworth’s investment on April 1, 2021.2. Prepare the journal entries by both firms to record all subsequent events related to the bonds through maturity. Journal entry worksheet Record the issuance of the bonds by Western Communications. (1enrty) Record the bond investment by Stillworth Corporation (1 entry) Record interest expense for Western Communications. ( 10 entries) Record interest revenue for Stillworth Corporation. (10 entries) Note: Enter debits…
On April 1, 2021, Western Communications, Inc., issued 12% bonds, dated March 1, 2021, with face amount of $47 million. The bonds sold for $46.3 million and mature on February 28, 2024. Interest is paid semiannually on August 31 and February 28. Stillworth Corporation acquired $47,000 of the bonds as a long-term investment. The fiscal years of both firms end December 31, and both firms use the straight-line method. 26 Required: 1. Prepare the journal entries to record (a) issuance of the bonds by Western and (b) Stillworth's investment on April 1, 2021. 2. Prepare the journal entries by both firms to record all subsequent events related to the bonds through maturity. Complete this question by entering your answers in the tabs below. Reg 2 Stillworth Req 1 Req 2 Western Prepare the journal entries for Western Communications, Inc., to record all subsequent events related to the bonds through maturity. (If no entry is required for a transaction/event, select "No journal entry required" in…
On April 1, 2018, Western Communications, Inc., issued 12% bonds, dated March 1, 2018, with face amount of$30 million. The bonds sold for $29.3 million and mature on February 28, 2021. Interest is paid semiannuallyon August 31 and February 28. Stillworth Corporation acquired $30,000 of the bonds as a long-term investment.The fiscal years of both firms end December 31, and both firms use the straight-line method.Required:1. Prepare the journal entries to record (a) issuance of the bonds by Western and (b) Stillworth’s investment onApril 1, 2018.2. Prepare the journal entries by both firms to record all subsequent events related to the bonds throughmaturity.

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