On January 1 of this year, Barnett Corporation sold bonds with a face value of $500,000 and a coupon rate of 7 percent. The bonds mature in 10 years and pay interest annually on December 31. Barnett uses the effective-interest amortization method. Ignore any tax effects. Each case is independent of the other cases. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answers to nearest whole dollar amount.) Required: 1. Complete the following table. The interest rates provided are the annual market rate of interest on the date the bonds were issued. a. Cash received at issuance b. Interest expense recorded in Year 1 c. Cash paid for interest in Year 1 d. Cash paid at maturity for bond principal Case A (7%) Case B (8%) Case C (6%)

On January 1 of this year, Barnett Corporation sold bonds with a face value of $500,000 and a coupon rate of 7 percent. The bonds mature in 10 years and pay interest annually on December 31. Barnett uses the effective-interest amortization method. Ignore any tax effects. Each case is independent of the other cases. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answers to nearest whole dollar amount.) Required: 1. Complete the following table. The interest rates provided are the annual market rate of interest on the date the bonds were issued. a. Cash received at issuance b. Interest expense recorded in Year 1 c. Cash paid for interest in Year 1 d. Cash paid at maturity for bond principal Case A (7%) Case B (8%) Case C (6%)

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 7MCQ

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On January 1 of this year, Barnett Corporation sold bonds with a face value of $507,500 and a coupon rate of 7 percent. The bonds mature in 20 years and pay interest annually on December 31. Barnett uses the effective-interest amortization method. Ignore any tax effects. Each case is independent of the other cases. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answers to nearest whole dollar amount.) Required: 1. Complete the following table. The interest rates provided are the annual market rate of interest on the date the bonds were issued. Case A (7%) Case B (8%) Case C (6%) a. Cash received at issuance $ 507,500 b. Interest expense recorded in Year 1 $ 35,525 c. Cash paid for interest in Year 1 $ 35,525 d. Cash paid at maturity for bond principal $ 507,500
On January 1 of this year, Diego Corporation sold bonds with a face value of $530,000 and a coupon rate of 5 percent. The bonds mature in 10 years and pay interest annually on December 31. Diego uses the effective-interest amortization method. Ignore any tax effects. Each case is independent of the other cases. (FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round your final answers to nearest whole dollar amount. Required:1. Complete the following table. The interest rates provided are the annual market rate of interest on the date the bonds were issued. Case A (5 percent) Case B (7 percent) Case C (4 percent) a. Cash received at issuance b. Interest expense recorded in Year 1 c. Cash paid for interest in Year 1 d. Cash paid at maturity for bond principal
On January 1 of this year, Barnett Corporation sold bonds with a face value of $510,000 and a coupon rate of 5 percent. The bonds mature in 20 years and pay interest annually on December 31. Barnett uses the effective-interest amortization method. Ignore any tax effects. Each case is independent of the other cases. Required: 1. Complete the following table. The interest rates provided are the annual market rate of interest on the date the bonds were issued. Case A (5 percent) Case B (6 percent) Case C (4 percent) a. Cash received at issuance b. Interest expense recorded in Year 1 c. Cash paid for interest in Year 1 d. Cash paid at maturity for bond principal ]\
Bhadiben
n Jan.1 of this year Barnett Cop. sold bonds with a face value of $506,000 and a coupon rate of 7%. The bonds mature in 10 years and pay interest annually on December 31. Barnett uses the effective interest amortization method. Ignore any tax effects. complete the following table. a. cash received at issuance- Case A-7%; Case B- 8%; Case C 6%.---b. Interest expense recorded in year 1- Case A-7% ; Case B - 8%; Case C-6%; c. Cash paid for interest in year 1- Case A 7%; Case B 8%; Case C 6% and d.- Cash paid at maturity for bond principle Case A -7% Case B 8% and Case C 6%
Prepare journal entries to capture the following events. Please ignore the interests and bond amortization. Use a tax rate of 20% if you need one. 1.12/15/2021: Purchased $200,000 of Harbox bonds, which is viewed as an AFS investment. 2.12/31/2021: Estimated the fair value of the Harbox investment at $187,000. 3.1/15/2022: Sold the Harbox investment for $162,000 and made all necessary entries to remove the Harbox investment from the accounts: a.Sale of investments: b.Reclassification (For expediency, you don’t need to record the temporary unrealized gains/losses between 12/31/2021 and 1/15/2022, since they will be reversed anyways):
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Williams Company issued $600,000 of 10%, 5-year bonds. Interest is paid semiannually, and the straight-line method is used for amortization. Assume that the market rate for similar investments is 12% and the bonds are issued on an interest date. What amount was received for the bonds? (round to nearest dollar) PRESENT VALUE OF $1 If n=5 and interest = 10%, then use the factor 0.62092 %3D But, if n=10 and interest = 6%, then use the factor 0.55839 %3D PRESENT VALUE OF ANNUITY $1 If n=5 and interest = 10%, then use the factor 3.79079 But, if n=10 and interest = 6%, then use the factor 7.36009 %3D O $486,276 O $600,000 O $630,000 O $555,837
A 73.
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On January 1 of this year, Clearwater Corporation sold bonds with a face value of $780,000 and a coupon rate of 9 percent. The bonds mature in 10 years and pay interest annually every December 31. Clearwater uses the straight-line amortization method and does not use a discount account. Assume an annual market rate of interest of 10 percent. (EY of $1. PV of $1. EVA of $1. and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required: 1.82. Prepare the journal entry to record the issuance of the bonds and the interest payment on December 31 of this year. 3. What bonds payable amount will Clearwater report on its December 31 balance sheet? Complete this question by entering your answers in the tabs below. Required 1 and 2 Required 3 Prepare the journal entry to record the issuance of the bonds and the interest payment on December 31 of this year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.…
journal entries to capture the following event. ignore the interests and bond amortization. Use a tax rate of 20%. 12/15/2021: Purchased $200,000 of Harbox bonds, which is viewed as an AFS investment.