On January 1, 2018, Piper Co. issued ten-year bonds with a face value of $1,000,000 and a stated interest rate of 9%, payable semianmally on June 30 and December 31. The bonds were sold to yield 12%. Assume that the issue price was $820,000. Instructions 1- Discount Amortized on June 30, 2018 equals: S 2- Interest Expense for the year ended on December 31, 2018 equals: S 3. Carrying Amount of the bonds on December 31 2018 equals: S

On January 1, 2018, Piper Co. issued ten-year bonds with a face value of $1,000,000 and a stated interest rate of 9%, payable semianmally on June 30 and December 31. The bonds were sold to yield 12%. Assume that the issue price was $820,000. Instructions 1- Discount Amortized on June 30, 2018 equals: S 2- Interest Expense for the year ended on December 31, 2018 equals: S 3. Carrying Amount of the bonds on December 31 2018 equals: S

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 January 1, 2021, Relay Company issued a 3-year, 12% bonds with face value of P3,000,000. Interest is payable annually every December 31 of each year starting December 31, 2021. The effective rate of interest on January 1, 2021 is 18%. PV of P1 @ 18% for 3 period................ 0.6086 PV of an ordinary annuity of P1@ 18% for 3 periods... 2.1743 At what amount shall the bonds be initially recognized of January 1, 2021? O P2,044,896 O P3,000,000 P2,483,088 O P2,608,548
Peplum Show Company issued $600,000 of 10%, 20-year bonds on January 1, 2018 at 102. Interest is payable semi-annually on July 1 and January 1. Peplum Show company uses effective-interest method for amortization of bon discount or premium as the case may be. Assuming effective yield of 9.7705%, prepare journal entry for payment of interest and related amortization on July 1, 2018. Date Account Detail & Explanation Debit Credit | 1/7/2018 Interest Expense $30,000 $102 Premium on bonds payable Cash $30,102| а. Date Account Detail & Explanation Debit Credit |1/7/2018 Interest Expense $60,000 $102 Premium on bonds payable b. Cash $60,102| Date Account Detail & Explanation Debit Credit | 1/7/2018 Interest Expense $29,898| $102 Premium on bonds payable Cash $30,000 с. Date Account Detail & Explanation Debit Credit | 1/7/2018 Interest Expense $29,312 Premium on bonds payable $102| d. Cash $29,414|
3. On July 1, 2018, Volunteer Inc. issued bonds with a $500,000 face value at 108.0 and the 5-year bonds have a 10% interest rate in a market with a rate of 8%. Interest is payable semi-annually and the effective-interest method is used for amortization. Prepare journal entries for the following transactions. Premium on Bonds Payable Interest Income Discount on Bonds Payable Interest Expense Cash Bonds Payable PLEASE NOTE: For each of the following journal entries there is one account's treatment (DR or CR), that depends on whether it is a bond issued at a premium or a discount. You are to identify if it is a DR or a CR. You must enter the account names exactly as written above and all dollar amounts will be rounded to whole dollars with "$" and commas as needed (i.e. $12,345). July 1, 2018: to record issuing the bonds DR DR/CR ? CR Dec. 31, 2018: to record the amortization & payment of interest to bondholders: DR…
Ellis Company issues 8.0%, five-year bonds dated January 1, 2021, with a $530,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $540,871. The annual market rate is 7.5% 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. Please need answer for all with working please answer do not waste time or question by holding attempt if you can otherwise skip
Sandhill Company issued $690,000, 12%, 10-year bonds on December 31, 2021, for $620,000. Interest is payable annually on December 31. Sandhill Company uses the straight-line method to amortize bond premium or discount.
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
Ellis Company issues 7.5%, five-year bonds dated January 1, 2021, with a $440,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $449,140. The annual market rate is 7.0% on the issue date. Required: 1. Compute the total bond interest expense over the bonds' life. 2 Dr the de life
Determining the present value of bonds payable and journalizing using the effective-interest amortization method Brad Nelson, Inc. issued $600,000 of 7%, six-year bonds payable on January 1, 2018. The market interest rate at the date of issuance was 6%, and the bonds pay interest semiannually. Requirements How much cash did the company receive upon issuance of the bonds payable? (Round to the nearest dollar.) Prepare an amortization table for the bond using the effective-interest method, through the first two interest payments. (Round to the nearest dollar.) Journalize the issuance of the bonds on January 1, 2018, and the first and second payments of the semiannual interest amount and amortization of the bonds on June 30, 2018, and December 31, 2018. Explanations are not required.
Complex Solution Company issues P2 M face value, 9%, 10-year bonds payable on December 31, 2023. Interest is paid semi-annually each June 30 and December 31. The bonds were sold at a price of 98. Complex uses the straight-line method of amortizing bond discounts and premium. **Compute for Amount of Bond Premium or Discount on December 31, 2023. **Bond Interest Expense for 2024 with respect to these bonds **Carrying Value of the bonds as of December 31, 2024.
Kitkat Company issued a P5,000,000, 10% 10-year bonds on July 1, 2021 for 113 when the effective interest rate was 8%. Interest is payable on June 30 and December 31. How much interest expense should Kitkat Company report in profit or loss for the year ended December 31, 2021?
PANGILINAN Company issued 3-year, 12% bonds with face amount of ₱4,000,000. Interest is payable semi-annually on April 1 and October 1. The bonds were issued on April 1, 2021 for ₱4,203,028 which represents an effective interest cost of 10% per year. REQUIREMENTS: a. How much is the interest paid for the year ended, December 31, 2021?b. How much is the interest expense for the year ended, December 31, 2021?c. What is the carrying amount of the bonds on December 31, 2021?
Terry Company is authorized to issue P5,000,000 of 6%, 10-year bonds dated July 1, 2011 with interest payments on June 30 and December 31. When bonds are issued on November 1, 2011, Terry Company received cash of P5,150,000 ( excluding interest). a. What is the discount or premium from the issuance of the bonds payable? Indicate whethere discount/premium. b. How much is the total interest expense for the whole life of the bond?