On January 1, Parson Freight Company issues 8.5%, 10-year bonds with a par value of $2,300,000. The bonds pay interest semiannually. The markerate of interest is 9.5% and the bond selling price was $2,143,712. The bond issuance should be recorded as:Multiple Choice22Debit Cash $2,300,000; credit Bonds Payable $2,300,000.Debit Cash $2143,712; credit Bonds Payable $2,143,712.Debit Cash $2,300,000; credit Bonds Payable $2,143,712: credit Discount on Bonds Payable $156,288.Nohit Cach 2143712 dehit Diecount on Ronds Pavahle $156.288 crerdit Ronds Pavahle 2 300 000McGrawHill< Prev9 of 10Next >9:12 P96%Type here to search3/21/20 Multiple ChoiceDebit Cash $2,300,000; credit Bonds Payable $2,300,000.Debit Cash $2,143,712; credit Bonds Payable $2,143,712.Debit Cash $2,300,000; credit Bonds Payable $2,143,712; credit Discount on Bonds Payable $156,288.Debit Cash $2,143,712; debit Discount on Bonds Payable $156,288; credit Bonds Payable $2,300,000.Debit Cash $2,143,712; debit Interest Expense $156,288; credit Bonds Payable $2,300,000.

The bonds are issued at discount when market rate is higher than the coupon rate of bonds payable.

On January 1, Parson Freight Company issues 8.5%, 10-year bonds with a par value of $2,300,000. The bonds pay interest semiannually. The m rate of interest is 9.5% and the bond selling price was $2,143,712. The bond issuance should be recorded as: Multiple Choice Debit Cash $2,300,000; credit Bonds Payable $2,300,000. Debit Cash $2,143,712; credit Bonds Payable $2,143,712. Debit Cash $2,300,000; credit Bonds Payable $2,143,712, credit Discount on Bonds Payable $156.288. Dohit Cach 2143 712 dahit Diernunt on Ronds Pavahle 156288 credir Ronde Pavahle 2300 000 Mc Graw Hill < Prev 9 of 10 Next > 96% Type here to search

On January 1, Parson Freight Company issues 8.5%, 10-year bonds with a par value of $2,300,000. The bonds pay interest semiannually. The m rate of interest is 9.5% and the bond selling price was $2,143,712. The bond issuance should be recorded as: Multiple Choice Debit Cash $2,300,000; credit Bonds Payable $2,300,000. Debit Cash $2,143,712; credit Bonds Payable $2,143,712. Debit Cash $2,300,000; credit Bonds Payable $2,143,712, credit Discount on Bonds Payable $156.288. Dohit Cach 2143 712 dahit Diernunt on Ronds Pavahle 156288 credir Ronde Pavahle 2300 000 Mc Graw Hill < Prev 9 of 10 Next > 96% Type here to search

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

On January 1, a company issues bonds: Par Value: $2,000,000 Bond Term, in years: 10 Interest Payments: 2x/year Stated Interest Rate: 8% Market Interest Rate: 6% How much will the bond sell for? What dollar amount will be booked to Bonds Payable on the date of sale? How much is Interest Expense on the FIRST interest payment? How much is the amortization of the Bond Premium on the FIRST interest payment? How much is the Interest Expense on the SECOND interest payment? How much is the Amortization of the Premium on the SECOND interest payment?
A company issued 8%, 15-year bonds with a par value of $470,000 that pay Interest semiannually. The market rate on the date of issuance was 8%. The journal entry to record each semiannual interest payment is: Multiple Choice 58:17 Debit Bond Interest Expense S18,800; credit Cash $18,800. Debit Bond Interest Expense $37,600; credit Cash $37,600. Debit Bond Interest Payable $31,333; credit Cesh $31,333. Debit Bond Interest Expense $420,000; credit Cash $420,000. due. No entry needed, since no interest is paid until the bond
Enviro Company issues 8%, 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 10%, which implies a selling price of 87 1/2. Prepare the journal entry for the issuance of the bonds for cash on January 1.
Ellis Company issues 6.5%, five-year bonds dated January 1, 2021, with a $250,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $255,333. The annual market rate is 6% on the issue 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.
Issuing Bonds at a Discount On the first day of the fiscal year, a company issues a $8,800,000, 11%, 5-year bond that pays semiannual interest of $484,00 ($8,800,000 x 11% x %2), receiving cash of $8,476,157. Journalize the bond issuance. If an amount box does not require an entry, leave it blank.
The Merchant Company issued 10-year bonds on January 1. The 8% bonds have a face value of $109,000 and pay interest every January 1 and July 1. The bonds were sold for $131,466 based on the market interest rate of 6%. Merchant uses the effective interest method to amortize bond discounts and premiums. On July 1 of the first year, Merchant should record interest expense (round to the nearest dollar) of $4,360 $3,270 $3,944 $5,259
On January 1, a company issued and sold a $400,000, 7%, 10-year bond payable, and received proceeds of $396,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The journal entry to record the first interest payment is: Multiple Choice Debit Bond Interest Expense $13,800; debit Discount on Bonds Payable $200; credit Cash $14,000. Debit Bond Interest Expense $28,000; credit Cash $28,000. Debit Bond Interest Expense $14,200; credit Cash $14,000; credit Discount on Bonds Payable $200. Debit Bond Interest Expense $14,000; credit Cash $14,000.
On January 1, Year 1, Sheffield Company issued bonds with a face value of $500,000, a term of ten years, and a stated interest rate of 5%. The bonds were issued at 104, and interest is payable each December 31. Sheffield uses the straight-line method to amortize bond discounts and premiums. What is the carrying value of the bonds at December 31, Year 4? Multiple Choice O O O O $508,000 $500,000 $512,000 $510,000
The Merchant Company issued 10-year bonds on January 1. The 9% bonds have a face value of $93,000 and pay interest every January 1 and July 1. The bonds were sold for $112,168 based on the market interest rate of 7%. Merchant uses the effective interest method to amortize bond discounts and premiums. On July 1 of the first year, Merchant should record interest expense (round to the nearest dollar) of $3,926 $5,048 $3,255 $4,185
On May 1, Holiday Company issued $200,000, 9%, 10-year bonds for $213,591 when the market rate was 8%. Prepare the general journal entry for the first semiannual interest payment and bond premium amortization on November 1, using the effective interest method. Round all amounts to the nearest dollar.
Enviro Company issues 10%, 10-year bonds with a par value of $300,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 12%, which implies a selling price of 88 1/2. Prepare the journal entry for the issuance of the bonds for cash on January 1. View transaction list Journal entry worksheet
1. On January 1, a company issues bonds dated January 1 with a par value of $300,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $312,177. The journal entry to record the issuance of the bond is: Debit Cash $312,177; credit Discount on Bonds Payable $12,177; credit Bonds Payable $300,000. Debit Cash $300,000; debit Premium on Bonds Payable $12,177; credit Bonds Payable $312,177. Debit Bonds Payable $300,000; debit Interest Expense $12,177; credit Cash $312,177. Debit Cash $312,177; credit Premium on Bonds Payable $12,177; credit Bonds Payable $300,000. Debit Cash $312,177; credit Bonds Payable $312,177.