On January 1, 2019, Hackman Corporation issued $1,400,000 face value 12% bonds dated January 1, 2019, for $1,423,060. The bonds pay interestsemiannually on June 30 and December 31 and are due December 31, 2023. Hackman uses the straight-line amortization method.Required:Record the issuance of the bonds and the first two interest payments.

Step 1:Required journal entries related to bonds are presented hereunder:No. DateAccount Titles and…

Answered: On January 1, 2019, Hackman Corporation…

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, 2018, Paradiso Company issued 1,000 of its 8%, $1,000 bonds at 93. Interest is payable semiannually on June 30 and December 31. The bonds will mature on December 31, 2027. If the company uses straight-line amortization, determine the amount of interest expense for 2018. answer is 87,000 how do you get there?
On January 1, 2020, PS ind issued P600,000 of 7% bonds, due in 10 years. The bonds were issued for P559,231, and pay interest each July 1 and January 1. It uses the effective- interest method. Prepare the company's journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Assume an effective-interest rate of 8%.
Hasley Company issued $800,000, 11%, 10-year bonds on December 31, 2018, for $730,000. Interest is payable annually on December 31.The Company uses the straight-line method to amortize bond premium or discount. 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.) Prepare the journal entry to record the payment of interest and the discount amortization on December 31, 2019. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Prepare the journal entry to record the redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
On January 1, 2021, Solo Securities issued a $600,000,6%, three-year bonds payable. The market rate was 4% at issuance. Interest is paid semi-annually each June 30 and December 31. Solo Securities uses the effective interest method of amortization.
Donner Corporation issues 4-year bonds with a face value of $5,000,000 and a stated rate of 5% on January 1, 2022. Interest is payable semiannually on June 30 and December 31. The market rate of interest is 6%. Donner's controller prepares the first two lines of the effective interest amortization table and asks you to prepare the third line. What is the company's INTEREST EXPENSE amount for this June 30, 2023 interest payment? Interest Cash Decrease Payment Date Payment Interest in Вook Amount Expense $144,735 $145,327 ???? Discount Discount Value June 30, 2022 $125,000 $125,000 $19,735 $20,327 $155,757 $4,844,243 Dec 31, 2022 $135,430 $4,864,570 June 30, 2023 Dec 31, 2023 June 30, 2024 Dec 31, 2024 June 30, 2025 Dec 31, 2025 $291,874 O $121,614 $125,000
On January 1, 2019, Kelly Corporation acquired bonds with a face value of $500,000 for $483,841.79, a price that yields a 10% effective annual interest rate. The bonds carry a 9% stated rate of interest, pay interest semiannually on June 30 and December 31, are due December 31, 2022, and are being held to maturity. Required: Prepare journal entries to record the purchase of the bonds and the first two interest receipts using the: 1. straight-line method of amortization 2. effective interest method of amortization
Blue Corporation issued a 10 year bonds on January 1, 2019. Costs associated with the bond issuance were P1, 600,000. Blue Corporation uses the straight line method to amortize bond issue costs. Prepare the December 31, 2019 entry to record the 2019 bond issue cost amortization.
Sterium Company issues P1,000,000 face value, 6%, 5-year bonds payable on December 31, 2018. Interest is paid semiannually each June 30 and December 31. The bonds sell at a price of 97; It uses the straight-line method of amortizing bond discount or premium. Sterium 's entry at June 30, 2019, Journalize to record the first semiannual payment of interest and amortization of discount on the bonds.
On January 1, 2020, Joe Construction issued $350,000, 3-year bonds for $320,000. The stated rateof interest was 7% and interest is paid annually on December 31.1. Calculate the amount of discount that will be amortized each period. Discount/period:2. Calculate the amount of interest expense for each period.Interest/period:3. Complete the amortization table below for Joe Constructions bonds. Joe ConstructionAmortization for BondsPeriod Cash Payment (credit)Interest Expense(debit)Discount onBondsPayable(Credit)Discount onBondsPayableBalance Book ValueAt issue $ - $ - $ - $ 320,00012/31/202012/31/202112/31/2022
Great Lake Glassware Company issues $1,050,000 of its 16%, 10-year bonds at 94 on February 28, 2024. The bonds pay interest on February 28 and August 31. Assume that Great Lake uses the straight-line method for amortization The journal entry to record the first interest payment on August 31, 2024 includes a OA. debit to Interest Expense for $87,150. OB. debit to Cash for $84,000. OC. debit to Discount on Bonds Payable for $3,150 OD. debit to Interest Expense for $80,850
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, 2019, Langka Inc. issued 9% bonds in the face amount of P5,000,000 which mature on January 1, 2019. The bonds were issued for P4,695,000 to yield 10%. Interest is payable annually on December 31. The entity used the interest method of amortizing bond discount. What is the carrying amount of the bonds on January 1, 2019?

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