On January 1.2018, Ellison Company purchased 12% bonds, having a maturity value of C800,000, for €860,652. The bondsprovide the bondholders with a 10% yield. They are dated January 1, 2018, and mature January 1. 2023, with interestreceivable December 31 of each year.CashInterestPremium Carrying AmountFair ValueDateReceivedRevenueAmortizedof Bonds01/01/2018860.65231/12/2018€96.000€86.065€ 9,935850,717849,00031/12/201996.00085,07210,928839.789842.152The journal entry to be recorded 31/12/2018, Includes

Scheduled of interest revenue and bond premium amortization 12%bond sold to yield 10% Date Cash…

On january 1, 2018. Ellison Company purchased 12% bond provide the bondholders with a 10% yield. They are dated receivable December 31 of each year. Premium Carn Amortized Cash Interest Date Revenue Received 01/01/2018 31/12/2018 €96.000 €86.065 € 9.935 31/12/2019 96.000 85.072 10.928

On january 1, 2018. Ellison Company purchased 12% bond provide the bondholders with a 10% yield. They are dated receivable December 31 of each year. Premium Carn Amortized Cash Interest Date Revenue Received 01/01/2018 31/12/2018 €96.000 €86.065 € 9.935 31/12/2019 96.000 85.072 10.928

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Brian Lee Company sells 8% bonds having a maturity value of $2,240,000 for $1,917,020. The bonds are…

A: The bonds are the long-term debt instruments. The coupon rate is fixed at the time of the issue of…

Q: Discount-Mart issues $19 million in bonds on January 1, 2021. The bonds have a eight-year term and…

A: Carrying value of bonds = Beginning carrying value + Increase in carrying value

Q: ista inc issued 00, 9% bonds for $7455000. The market rate of interest for these bonds is 8%…

A: The bonds are issued at a premium, when the market rate is lower than the coupon rate of bonds…

Q: On 1 January 2020, Halo Limited purchased a 9% $900,000 bond as its debt investment. 1. Halo…

A: Debt investment includes the investment to be made for outsider’s liability by borrowing loans,…

Q: Devon Harris Company sells 10% bonds having a maturity value of 2,000,000 for 1,855,816. The bonds…

A: Bonds payable is a form of long-term debt that signifies a company's responsibility to return funds…

Q: 5. Queens Company issues $1M of 6%, 20-year bonds payable on 3/1/2024, which are sold at a price of…

A: The discount on bonds arises when the market offers higher interest earnings than the bonds. The…

Q: payable annually on January 1. Effective interest rate is 12 %. Set up a schedule of interest…

A: It is given that 10% bonds having a maturity value of $2,000,000 for $1,855,816 &…

Q: Tuku limited issued a 5% K70 million bond on 1/1/2018. The bond attract an issue costs of 10% as…

A: Initial Recognition (1/1/2018):Cash received from the issuance of the bond: K70,000,000Issuance…

Q: PART I- On November 1, 2020, your company issued $600,000 of 5 year 9% bonds when the interest rate…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: Q6

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: on january 1,2018 naperville corporation issued 2300,000 16% 5 year bonds wirh interest payable on…

A: Interest payment = $2,300,000*16%*6/12 Interest payment = $184,000

Q: (A *D) (H - 1) (K* E) Jan 1 2019 June 30, 2019 December 31, 2019 June 30, 2020 December 31, 2020…

A: Valuation of Bond Amortisation of Bond Journal Entries related to the Bond

Q: Discount Mart issued ten thousand $1,000 bonds on January 1, 2024. The bonds have a 10-year term and…

A: Bonds are generally issued either by the government or corporations. These entities use bonds to…

Q: On March 1, 2014, Khaleesi Company issued 10-year P5,000,000 8% term bonds dated March 1, 2014 and…

A: Unamortized discount on bonds payable of 333,906

Q: • On January 1, 2020, X Company purchased $2,000,000 in bonds that will mature in 10 years and pay…

A: Company needs capital and funds for the purpose of financing its assets. In order to finance the…

Q: Tamarisk Ltd issued a $1,094,000, 10-year bond dated January 1, 2023. The bond was sold to yield 12%…

A: A firm or group may issue bonds payable as a form of long-term debt to raise capital from investors.…

Q: Brian Lee Company sells 8% bonds having a maturity value of $2,240,000 for $1,917,020. The bonds are…

A: The bonds are issued to raise the money from the market or investors. The bonds are issued at a…

Q: On June 30, 2021, the market interest rate is 5%. Team Corporation issues $600,000 of 10%, 25-year…

A: Bonds are the securities which are issued by the entity for the purpose of raising funds from the…

Q: Hardev

A: The carrying value of a bond represents the amount at which the bond is reported on the company's…

Q: SM Corporation issued a 5-year 9.5% P1,000,000 face value bonds to YG Corporation in an 8.16% market…

A: Here asked for the bond valuation and its calculation to make the effective bond valuation related…

Q: Vaughn Manufacturing issues $5130000, 6%, 5-year bonds dated January 1, 2020 on January 1, 2020. The…

A: The question is based on the concept of Financial Management.

Q: On January 1, 2022, Pina Colada and Lois Company purchased 12% bonds having a maturity value of…

A: Other comprehensive income (OCI) is the term used in company accounting to describe unrealized…

Q: 17. Alvin Jackson Co. issued $10,000 of bonds on January 1, 2021. The bonds pay interest…

A: As per US GAAP, Interest on financial Liability is to be booked using the amortized cost method,…

Q: On January 1, 2025, Wildhorse Company purchased 6% bonds, having a maturity value of $510,000 for…

A: Introduction: An investor invests in bonds to earn regular interest payment over the period of bond…

Q: On March 1, 2021, Pyramid Company issued 10% bonds Problem 6-10 (IAA) payable with face amount of…

A: Under effective interest method the current price of the bond is the present value of all cash…

Q: Novak corp. Issued $417,000,11% 15 year bond on december 31,2021,for 404,490 interest is payable…

A: Bonds are considered a financial instrument used to raise finance for the organization. It is also…

Q: Solar Energy Inc. issued a $915,000, 7.0%, five-year bond on October 1, 2023. Interest is paid…

A: A journal entry is a formal accounting record that documents a financial transaction by recording…

Q: izy Company issued $1,000,000 of 3-year, 10% bonds on January 1, 2023. The bonds pay interest…

A: 1.Initial measurement of financial instruments : Under IFRS 9, all financial instruments are…

Q: Devon Harris Company sells 10% bonds having a maturity value of $2,000,000 for $1,855,816. The bonds…

A: Bonds payable is a long-term liability in which the bonds has been issued in lieu of amount borrowed…

Q: ctions for Zillow include an explanation for each entry A. Insurance if the bonds payable at par on…

A: Journal entries refers to the process of systematic documentation of the financial transactions of a…

Q: 2. On June 30, 2018 the market rate of interest Is 9%. Ramsey Cor issues$550,000 of 12%, 20 year…

A: Bonds can be issued at par, at premium or at discount. The interest payment on bonds is made…

Q: On January 1, 2017, JWS Corporation issued S600.000 7% Bonds due in 10 years. The bonds were issued…

A: Given that: Face value of bonds = $600,000 Interest rate = 7% Issue price = $599,224

Q: On July 1 2023 Davis Corp issued $800,000 par value 10% 10-year bonds with interest payable semi…

A: A bond is an investment security that is issued by large organizations to raise funds. Bonds are…

Q: On January 1, 2025, Wildhorse Company purchased 7% bonds, having a maturity value of $620,000 for…

A: Introduction:An investor invests in bonds to earn regular interest payment over the period of bond…

Q: Legacy issues $660,000 of 5.5%, four-year bonds dated January 1, 2019, that pay interest…

A: A company issues bonds to raise capital and finance the business. The bonds will be issued at par,…

Q: On Jan. 1, 2018, UMPI, Inc. issued $600,000, of 10% bonds, due in 5 years. The bonds pay interest…

A: The question is based on the concept of Financial Accounting.

Q: On June 30, 2021 the market interest rate is 10% winner corporation issues $850,000 of 11% 30 year…

A: The objective of the question is to calculate the issue price of the bond issued by Winner…

Q: Show your solution pls On March 1, 2016, Rose Corporation issued at 103 plus accrued interest, one…

A: Bonds are issued by governments and businesses when they need to generate revenue. When you buy a…

Q: Problem 4: DONNER Company issued 3-year, 12% bonds with face amount of P4,000,000. Interest is…

A: The bonds are issued at premium when market rate is higher than the face value of bonds.

Q: a. On January 1, 20X1, your firm issues a $15,000, 4-year, 5% bond with interest payable annually…

A: The financial transactions are initially recorded in the for of journal entry.

Q: Company X issues 100 bonds totaling $100,000 on January 1st, 2022 at 3% interest when the market…

A: Journal Entry : Method of recording financial transactions in the book of original entry by debiting…

Q: wrtin Company issues $2,000,000, 6%, 5-year bonds on lanuary 1, Year 4. The bonds pay interest…

A: Solution: The issuer of bonds pays a periodic amount of interest to the bondholders. The Interest…

Q: On January 1, 2021, Relay Company issued a 3-year, 12% bonds with face value of P3,000,000. Interest…

A: Relay Company issued 3 year, 12% bond having face value P 3,000,000 on January 1, 2021. Effective…

Question

On January 1.2018, Ellison Company purchased 12% bonds, having a maturity value of C800,000, for €860,652. The bonds
provide the bondholders with a 10% yield. They are dated January 1, 2018, and mature January 1. 2023, with interest
receivable December 31 of each year.
Cash
Interest
Premium Carrying Amount
Fair Value
Date
Received
Revenue
Amortized
of Bonds
01/01/2018
860.652
31/12/2018
€96.000
€86.065
€ 9,935
850,717
849,000
31/12/2019
96.000
85,072
10,928
839.789
842.152
The journal entry to be recorded 31/12/2018, Includes

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

1. On January 1, 2017, Mintwood Company issued 5 year bonds with a face value of $500,000. The bonds carry a stated interest of 7% payable each January 1. 98 % = 490,o00 (a) Prepare the journal entry for the January1 issuance asşuming the bonds are issued at 98. Jon 1,20 Cosh 490, 000 Diseand Bondyble Bord> Payable (b) Prepare the journals entry at December 31 for these bonds. (c) Prepare the journal entry for the January 1 issuance assuming the bonds are issued at 103. (d) Prepare the journals entry at December 31 for these bonds. (e) Prepare the journal entry at January 1 issuance assuming the bonds are issued at 100. (f) Prepare the journal entry at December 31 for these bonds 2. On March 1, the Holden Company borrows $60,000 from New National Bank by signing a 6-month, 8%, interest-bearing note. (a) Prepare the entry on March 1 when the note was issued. (b) Prepare any adjusting entries necessary on June 30 in order to prepare the semiannual financial statements. Assume no other…
Joseph Moore Company sells 9% bonds having a maturity value of $1,720,000 for $1,534,000. The bonds are dated January 1, 2025, and mature January 1, 2030. Interest is payable annually on January 1. Click here to view factor tables. Set up a schedule of interest expense and discount amortization under the straight-line method. (Round answers to 2 decimal places, e.g. 38,548.25.) Cash Paid 154800 10 Schedule of Discount Amortization Straight-Line Method Interest Expense LA Discount Amortized i 00 101 Carrying Value of Bonds 5000 1534000
1. Downing Company issues $1,000,000, 12%, 10-year bonds on January 1, 2020. The bonds pay interest quarterly on March 31, June 30, September 30 and December 31. The bonds are issued to yield 8%. a) Calculate the issue price of the bonds in dollars b) Calculate the issue price of the bonds as a percent c) Make the journal entry to record the sale of the bond
9.2 On Jan. 1, 2018, UMPI, Inc. issued $600,000 of 10% bonds, due in 5 years. The bonds pay interest semi-annually on July 1 and January 1. The bonds effective yield 12%. UMPI uses the effective-interest method (see PV Tables next page). Prepare UMPI’s journal entries for a thru c. The January 1 issuance The July 1 interest payment The December 31 adjusting journal entry Prepare a full Bond Amortization Schedule
Kingbird corporation issued $460,000 8% 20 year bond on January 1,2022 for $418,008.this price resulted in an effective interest rate of 9% on the bonds. Interest is payable annually on January 1. Kingbird uses the effective interest method to amortize bond premium or discount. Prepare the journal entry to record the payment of interest on January 1 2023
Paul White Company sells 10% bonds having a maturity value of $1,900,000 for $1,763,025. The bonds are dated January 1, 2025, and mature January 1, 2030. Interest is payable annually on January 1. Click here to view factor tables. Set up a schedule of interest expense and discount amortization under the straight-line method. (Round answers to 2 decimal places, e.g. 38,548.25.)
You found the following ledger account balances of ABC Corporation: 12% Bonds Payable, due March 31, 2020 10/1/17 3,060,000 3/31/15 10,000,000 Premium on Bonds Payable 3/31/15 772,144 Bond Interest Expense 3/31/17 600,000 9/30/17 600,000 The bonds pay interest semiannually on March 31 and September 30. The bonds were issued on March 31 at a price yield 10%. On October 1, 2017, P3,000,000 of the bonds were redeemed for permanent cancellation at 102.
Solar Energy Inc. issued a $910,000, 10.0%, five-year bond on October 1, 2023. Interest is paid annually each October 1. Solar’s year-end is December 31. Period Ending CashInterestPaid PeriodInterestExpense DiscountAmort. UnamortizedDiscount CarryingValue Oct. 1/23 $ 33,633 $ 876,367 Oct. 1/24 $ 91,000 $ 96,400 $ 5,400 28,232 881,768 Oct. 1/25 91,000 96,994 5,994 22,238 887,762 Oct. 1/26 91,000 97,654 6,654 15,584 894,416 Oct. 1/27 91,000 98,386 7,386 8,198 901,802 Oct. 1/28 91,000 99,198 8,198 0 910,000 $ 455,000 $ 488,633 $ 33,633 Assume that interest has already been paid on October 1, 2026.Required:Using the amortization schedule provided above, record the entry to retire the bonds on…
ABC company issued a 5 year $200,000 bond. The bond has a stated rate of 6% and the market rate of 8%. The company issued the bond at .91889 or $183,778 on January 1", 2019. AMORTIZATION OF BOND DISCOUNT st H J K Interest on Cash Interest Amortization Carrying Value (K + J) Carrying Year Payment. of Discount. Date Description Debit Credit Value. (A * D) (I - H) (K * E) Jan 1 2019 Jan 1, 2019 June 30, 2019 December 31, 2019 June 30, 2020 December 31, 2020 June 30, 2021 December 31, 2021 June 30, 2022 December 31, 2022 June 30, 2023 December 31, 2023 June 30, 2019 Dec 31, 2019 June 30, 2020 A Bond Par Value Discount on Bond Payable B Coupon Rate Jan 1, 2019 June 30, 2,019 Market Rate Dec 31, 2019 Dec 31, 2020 6month coupon rate (B/2) 6 month market rate (C/2) D June 30, 2020 E Dec 31, 2020 Money Received Discount (A-F) F Dec 31,2023
Please answer do not image format
h
Sir plz help me urgently please