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On January 1, 2020, Bridgeport Company purchased 12% bonds, having a maturity value of $287,000 for $308,758.85. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Bridgeport Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair
2020 $306,500
2023 $297,700
2021 $296,800
2024 $287,000
2022 $295,800
(b) Prepare the journal entries to record the interest revenue and recognition of fair value for 2020.
(c) Prepare the
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- Recording Bond Entries and Reporting Bonds- Effective Interest, Straight-Line Master Corp. issued 5%, $360,000 bonds on January 1, 2020. The bonds pay cash interest semiannually each July 1 and January 1, and were issued to yield 6%. The bonds mature January 1, 2030, and the company uses the effective interest method to amortize bond discounts or premiums. Required a. Prepare journal entries on the following dates. 1. January 1, 2020–Issuance of bonds. 2. July 1, 2020–Interest payment. 3. December 31, 2020–Interest accrual. 4. January 1, 2021–Interest payment. b. Answer part a assuming instead that the company uses the straight-line interest method to amortize discounts and premiums and the bonds were sold on March 1, 2020, for $332,978 (excluding accrued interest). Hint. Amortize discount on bonds payable over a 118 month bond term.On January 1, 2021, a company issues 3-year bonds with a face value of $160,000 and a stated interest rate of 7%. Because the market interest rate is 5%, the company receives $168,714 for the bonds. Required: Fill in the table assuming the company uses effective-interest bond amortization. (Round your answers to the nearest whole dollar.) Period Ended Cash Paid 01/01/2021 12/31/2021 12/31/2022 12/31/2023 Interest Expense Amortized Premium $ 0 0 0 Bonds Payable Premium on Bonds Payable Carrying Value $ 0 0 0 0On January 1, 2020, Stellar Company purchased 12% bonds, having a maturity value of $325,000 for $349,639.81. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Stellar Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows. 2020 $347,400 2023 $334,900 2021 $333,800 2024 $325,000 2022 $332,800 (a) Prepare the journal entry at the date of the bond purchase. (b) Prepare the journal entries to record the interest revenue and recognition of fair value for 2020. (c) Prepare the journal entry to record the recognition of fair value for 2021.
- On January 1, 2024, Robert Unlimited issues 8%, 20-year bonds payable with a face value of $240, 000 The bonds are issued at 104 and pay interest on June 30 and December 31. (Assume bond payable are amortized using the straight-line amortization method.) Read the requirements. Requirement 1. Journalize the issuance of the bonds on January 1, 2024. (Record debits first, then credits. Select explanations on the last line of the journal entry.) \table[[Date, Accounts and Explanation, Debit, Credit ], [2024], [Jan. 1]...........] Requirements Joumalize the issuance of the bonds on January 1, 2024. Journalize the semiannual interest payment and amortization of bond premium on June 30, 2024. Journalize the semiannual interest payment and amortization of bond premium on December 31, 2024 Journalize the retirement of the bond at maturity, assuming the last interest payment has already been recorded. (Give the date.)On January 1, 2025, Crane Company purchased 6% bonds, having a maturity value of $530,000 for $457,971. The bonds provide the bondholders with a 8% yield. They are dated January 1, 2025, and mature January 1, 2035, with interest receivable June 30 and December 31 of each year. Crane Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale. The fair value of the bonds at December 31 of each year-end is as follows. 2025 2026 2027 (a) (b) (c) No. (a) $459,297 454,297 2029 (b) 449,297 (Round answers to O decimal places, e.g. 2,525. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date 2028 Prepare the journal entry at the date of the bond purchase. Prepare the journal entries to record the interest received and recognition…Hernandez company issued $380,000, 7%, 10-year bonds on January 1, 2022, for $407,968. this price resulted in an effective-interest rate of 6% on the bonds. interest is payable annually on January 1. hernandex]z uses the effective-interest method to amortize bond premium or discount. prepare the journal entry to record the accrual interest and the premium amortization on December 31, 2022.
- On January 1, 2019, Drennen Inc. issued $5 million face amount of 10-year, 14% stated rate bonds when market interest rates were 12%. The bonds pay semiannual interest each June 30 and December 31 and mature on December 31, 2028. Table 6-4, Table 6-5 (Use appropriate factor from the table provided.) Required:a. Calculate the proceeds (issue price) of Drennen Inc.'s bonds on January 1, 2019, assuming that the bonds were sold to provide a market rate of return to the investor. (Round PV factor to 4 decimal places.) b-1.Assume instead that the proceeds were $4,820,000. Use the horizontal model to record the payment of semiannual interest and the related discount amortization on June 30, 2019, assuming that the discount of $180,000 is amortized on a straight-line basis. Indicate the financial statement effect.(Enter decreases with a minus sign to indicate a negative financial statement effect.) b-2. Assume instead that the proceeds were $4,820,000. Record the journal entry to show the…On January 1, 2019, Ellison Co. issued 3-year, 10%, $200,000 face value bonds. The bonds were issued at 95.0827 , the interest payable semiannually on July 1 and January 1. The bonds were sold to yield 12%. On July 1, 2020 The company retire 60% of the bonds at 102. a) Complete the following table: Cash Paid Carrying amount of Interest Discount Date Expense Amortization bonds January 1, 2019 July 1, 2019 January 1, 2020 July 1, 2020 January 1, 2021 July 1, 2021 January 1, 2022 b) Journalize the required entries on the following dates January 1, 2019 July 1, 2019 December 31, 2019 – adjusting entry January 1, 2020 July 1, 2020 The payment of interest July 1, 2020 the retirement of 60% of the bonds at 102 December 31, 2020 – adjusting entryAttemptnrogress On January 1, 2025, Flounder Company purchased 8% bonds having a maturity value of $200,000 for $216,849.76. The bonds provide the bondholders with a 6% yield. They are dated January 1, 2025, and mature January 1, 2030, with interest received on January 1 of each year. Flounder Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category. (a) Prepare the journal entry at the date of the bond purchase. (List debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to 2 decimal places, e.g. 1,225.25.) Date Account Titles and Explanation Jan. 1, 2025 eTextbook and Media List of Accounts Save for Later O Search 1 DOLL Debit Attempts: 0 of 3 used Credit Submit Answer
- Ellis Company Issues 7.0%, five-year bonds dated January 1, 2019, with a $510,000 par value. The bonds pay Interest on June 30 and December 31 and are issued at a price of $531,755. The annual market rate is 6% on the Isue 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare an effective interest amortization table for the bonds' life. Semiannual Period- Cash Interest Bond Interest Paid Premium Amortization Unamortized Premium Carrying Value End Expense 01/01/2019 21,755 S 531,755 08/30/2019 17,850 12/31/2019 17,850 08/30/2020 12/31/2020 08/30/2021 12/31/2021 08/30/2022 12/31/2022 08/30/2023 12/31/2023 TotalOn January 1, 2020, Swifty Company sold 11% bonds having a maturity value of $700,000 for $726,535, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2020, and mature January 1, 2025, with interest payable December 31 of each year. Swifty Company allocates interest and unamortized discount or premium on the effective-interest basis. v (a) V Your answer is correct. Prepare the journal entry at the date of the bond issuance. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit January 1, 2020 726,535 Cash Bonds Payable 700,000 Premium on Bonds Pay: 26535
