On January 1 of this year, Ikuta Company issued a bond with a face value of $200,000 and a coupon rate of 5 percent. The bondmatures in three years and pays interest every December 31. When the bond was issued, the annual market interest rate was 6percent. Ikuta uses the effective-interest amortization method. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s)from the tables provided.)Required:1. Complete a bond amortization schedule for all three years of the bond's life.2. What amounts will be reported on the statement of earnings and the statement of financial position at the end of year 1 and year 2?Complete this question by entering your answers in the tabs below.Required 1 Required 2Complete a bond amortization schedule for all three years of the bond's life. (Round your intermediate calculations and finalanswers to whole dollars.)DateJanuary 01, Year 1December 31, Year 1December 31, Year 2Cash Interest Interest Expense Amortization Book Value of BondDecember 31, Year 3Complete this question by entering your answers in the tabs below.Required 1Required 2What amounts will be reported on the income statement and balance sheet at the end of Year 1 and Year 2? (Round yourintermediate calculations and final answers to whole dollars.)December 31Income statement:Interest expenseBalance Sheet:Bonds payableYear 1Year 2

Bonds payable is a type of instrument where by an amount is borrowed for a fixed period with fixed…

On January 1 of this year, Ikuta Company issued a bond with a face value of $200,000 and a coupon rate of 5 percent. The bond matures in three years and pays interest every December 31. When the bond was issued, the annual market interest rate was 6 percent. Ikuta uses the effective-interest amortization method. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate fact from the tables provided.)

On January 1 of this year, Ikuta Company issued a bond with a face value of $200,000 and a coupon rate of 5 percent. The bond matures in three years and pays interest every December 31. When the bond was issued, the annual market interest rate was 6 percent. Ikuta uses the effective-interest amortization method. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate fact from the tables provided.)

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

Enviro Company issues 11.00%, 10-year bonds with a par value of $310,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 8.00%, which implies a selling price of 124.875. The straight-line method is used to allocate interest expense. 1. What are the issuer’s cash proceeds from issuance of these bonds?2. What total amount of bond interest expense will be recognized over the life of these bonds?3. What is the amount of bond interest expense recorded on the first interest payment date?
Park Corporation is planning to issue bonds with a face value of $2,800,000 and a coupon rate of 7 percent. The bonds mature in 10 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Park uses the effective - interest amortization method and also uses a premium account. Assume an annual market rate of interest of 6.0 percent. (FV of $1, PV of S1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required: 1. and 2. Prepare the journal entry to record the issuance of the bonds and the interest payment on June 30 of this year 3. What bonds payable amount will Park report on its June 30 balance sheet?
Hartford Research issues bonds dated January 1 that pay interest semiannually on June 30 and December 31. The bonds have a $39,000 par value and an annual contract rate of 8%, and they mature in 10 years. (Table B.1, Table B.2, Table B.3, and Table B.4) Note: Use appropriate factor(s) from the tables provided. Round all table values to 4 decimal places, and use the rounded table values in calculations. Required: Consider each separate situation. 1. The market rate at the date of issuance is 6%. (a) Complete the below table to determine the bonds' issue price on January 1. (b) Prepare the journal entry to record their issuance. 2. The market rate at the date of issuance is 8%. (a) Complete the below table to determine the bonds' issue price on January 1. (b) Prepare the journal entry to record their issuance. 3. The market rate at the date of issuance is 10%. (a) Complete the below table to determine the bonds' issue price on January 1. (b) Prepare the journal entry to record their…
Bringham Company issues bonds with a par value of $660,000 on their stated issue date. The bonds mature in 10 years and pay 9% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 12%. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) 1. What is the amount of each semiannual interest payment for these bonds?2. How many semiannual interest payments will be made on these bonds over their life?3. Use the interest rates given to select whether the bonds are issued at par, at a discount, or at a premium.4. Compute the price of the bonds as of their issue date.5. Prepare the journal entry to record the bonds’ issuance.
On January 1, 2024, Christmas Anytime issues $850,000 of 6% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. Assume that the market interest rate is 7% and the bonds issue at a discount.2a. Calculate the issue price of a bond.2b. Complete the first three rows of an amortization schedule. (FV of $1, PV of $1, FVA of $1, and PVA of $1)
. On 1/1/21, Ehrlich Co. issued 4 year bonds with a face value of $700,000. The stated (bond) rate is 8%, payable semiannually on 1/1 and 7/1. The market rate at the time of issuance was 10%. a. Calculate the issue price of the bonds. b. Prepare the journal entry for the issuance of the bonds. c. Complete the amortization table below. Date cash paid interest expense amortization carrying value 1/1/21 7/1/21 1/1/22 7/1/22 d. Prepare the journal entries for the 7/1/21 interest payment and amortization, 12/31/21 interest accrual and amortization, and 1/1/22 interest payment. e. Prepare the journal entry for retirement of the bonds at maturity f. Assume instead that the bonds were redeemed on 7/1/22 at 102. Prepare the journal entry.
Enviro Company issues 12.00%, 10-year bonds with a par value of $460,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 9.00%, which implies a selling price of 128.625. The straight-line method is used to allocate interest expense. What are the issuer's cash proceeds from issuance of these bonds? What total amount of bond interest expense will be recognized over the life of these bonds? What is the amount of bond interest expense recorded on the first interest payment date?
Waldron Corporation issued $900,000 of 16%, 10-year bonds payable on January 1, 2022. The market interest rate at the date of issuance was 14%, and the bonds pay interest semiannually (on June 30 and December 31). Waldron Corporation's year-end is June 30. Read the requirements 1. Using the PV function in Excel, calculate the issue price of the bonds. (Round your answer to the nearest whole dollar) The issue price of the bonds is Requirements 1. Using the PV function in Excel, calculate the issue price of the bonds. 2. Prepare an effective-interest amortization table for the bonds through the first three interest payments, Round amounts to the nearest dollar. 3. Record Waldron Corporation's issuance of the bonds on January 1, 2022, and payment of the first semiannual interest amount and amortization of the bond premium on June 30, 2022 Explanations are not required Print Done
On January 1 of this year, Ikuta Company issued a bond with a face value of $115,000 and a coupon rate of 4 percent. The bond matures in 3 years and pays interest every December 31. When the bond was issued, the annual market rate of interest was 5 percent. Ikuta uses the effective-interest amortization method. (FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required: 1. Complete a bond amortization schedule for all three years of the bond's life. 2. What amounts will be reported on the income statement and balance sheet at the end of Year 1 and Year 2? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete a bond amortization schedule for all three years of the bond's life. Note: Round your intermediate calculations and final answers to whole dollars. Date January 01, Year 1 December 31, Year 1 December 31, Year 2 December 31, Year 3 Cash Interest Interest Expense Amortization Book…
Serotta Corporation is planning to issue bonds with a face value of $440,000 and a coupon rate of 12 percent. The bonds mature in two years and pay interest quarterly every March 31, June 30, September 30, and December 31. All of the bonds were sold on January 1 of this year. Serotta uses the effective-interest amortization method and also uses a premium account. Assume an annual market rate of interest of 8 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) 1. Provide the journal entry to record the issuance of the bonds January 1.
A business is planning to issue 10%, 6-year bonds with a par value of $525,000 on January 1 of the current year. The bonds pay semiannual interest on June 30 and December 31. Assuming the market rate for the bonds on the issue date is 8%, compute the total cash proceeds from the bond issue. Note: Use factor(s) from tables provided. Round "Table value" to 4 decimals and final answer to the nearest whole dollar. (PV of $1, FV of $1, PVA of $1, and FVA of $1) Table Values are Based on: Cash Flow Present (maturity) value Interest (annuity) Total cash proceeds n = Table Value Amount Present Value
NoleCo issues bonds on January 1, 20X2. The bonds mature ten years from this date and pay interest semi-annually on June 30 and December 31 each year. The face value of the bonds is $500,000 and the coupon/stated rate is 8%. The market rate on the issue date is 7%. The bonds were issued for $535,531. Required: Complete the three parts below. Part A: The interest expense that NoleCo should recognize on June 30, 20X2 is: $20,000 $17,500 $18,744 $18,826 $21,421 Part B: The interest expense that NoleCo should recognize on December 31, 20X2 is: $18,686 $20,000 $18,788 $18,700 $17,500 Part C: The carrying value of these bonds on December 31, 20X2 (after the interest payment on that date) is: $533,248 $502,556 $500,000 $538,087 $532,975