On January 1, Year 1, Mega Corporation issues $100,000 of 8% bonds maturing in 10 years, when the market rate of interest is 9%. Market interest rates drop to 6% by December 31, Year 2. The company retires the bonds on December 31, Year 2 by paying $112,561. The carrying value of the bonds as of this date is $94,383. Retirement of the bonds results in a:

Q: On January 1, 2020, Naples Co. issued $280,000 of 10-year bonds at 96. The bonds pay 6% cash…

A: Total discount on bonds  retired on June 1, 2020 = Total amount of bonds issued x % of bonds retired…

Q: Oriole Company retires its $540000 face value bonds at 102 on January 1, following the payment of…

A: The company is paying value of the bonds is $519,750  And bonds carrying value is  $540,000*102% =…

Q: The Smart Company sold $500,000 of 8 percent, 20-year bonds on April 1, 2011, at 105. The semiannual…

A: The objective of the question is to calculate the interest expense for the bond interest payment on…

Q: On January 1, 2021, a company issued $2,000,000, 10-year, 7% bonds, when the market rate was 8%.…

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

Q: equirements Without making joumal entries, compute the carrying amount of the bonds payable at July…

A: When the shares are issued at the value lower than the face value, it is said to be issued at…

Q: Premium Pizza retires its 7% bonds for $72,000 before their scheduled maturity. At the time, the…

A: Early retirement of bonds: it is the process of repaying the principal amount of bonds to…

Q: On April 30, one year before maturity, Middleton company retired $200,000 of its 9% bonds payable at…

A: The retirement amount on bond is $202,000. The book value of bond is $196,000.

Q: Robin Corporation retires its $800000 face value bonds at 104 on January 1, following the payment of…

A: Redemtption value refers to the price which is to be considered while purchasing the security for…

Q: onds pay interest semiannually on June 30 and December 31. If the bonds are retired at the end of…

A: Amortization of bonds refers to the process in which the carrying value of the bond is adjusted with…

Q: Godwin corporation retired its bonds at 105 on january 1 after the payment of interest. The face…

A: Bond retirement refers to the cancellation or repurchase of bonds that were earlier issued. The…

Q: On April 30, one year before maturity, Middleton Company retired $240,000 of its 9% bonds payable at…

A: A bond is issued in exchange for a loan that a borrower—a corporate or governmental entity—gets from…

Q: On January 2, Year 1, Kampai Sushi Bar sold $800,000 of bonds for $785,000. The bonds will mature in…

A: Since the bond is sold for lesser amount and the bond will mature in 10 years, each year the amount…

Q: Vaughn Manufacturing retires its bonds at 105 on January 1, following the payment of annual…

A: In the current case, the company holds bonds with a face value of $720,000. The carrying value of a…

Q: Sterling Company issued $100,000 of its 8%, five-year bonds on January 1, 2017, at 98. Interest is…

A: Compute cash interest on the bonds up to April 1, 2019 as shown below:

Q: Sarasota Corp. retires its $928000 face value bonds at 105 on January 1, following the payment of…

A: Journal entry is a record of financial transaction in the books of accounts of a business. It has a…

Q: South Fork Farms, Inc., reported $5,000,000 of 6% bonds payable. Interest is payable semi-annually.…

A: Bond is an investment security which is issued by large organization in order to raise funds. Bond…

Q: Josselle Corporation retires its bonds at 106 on January 1, after the payment of interest.The face…

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: Discount Pizza retires its 7% bonds for $68,000 before their scheduled maturity. At the time, the…

A: Given information is: Discount Pizza retires its 7% bonds for $68,000 before their scheduled…

Q: Schwer, Inc. issued $500,000 of 10%, 15-year bonds at 95 on July 1, 2012. Interest is payable…

A: Bonds may be issued at discount when the interest on the bonds is higher than the market interest…

Q: e entry to record the retirement will include:

A: When a company buys back bonds that it previously sold to investors, this is known as a bond…

Q: On January 1, 2020 Jinn Inc. issued 10-year, 10% $100,000 bonds for 105, because the market rate of…

A: The bonds are issued to raise funds from the market or investors of the business. The bonds are…

Q: Oceanview Magazine issued $690,000 of​ 15-year, 6% callable bonds payable on July​ 31, 2024​, at 98.…

A: Bonds are high - security debt instruments that is used by entity's to raise funds and fulfill…

Q: . Dechow, Inc., issued $250,000 of 8%, 15-year bonds at 97 on July 1, 2009. Interest is payable…

A: a.Prepare journal entry to record issuance of bonds payable and the retirement of the bonds.

Q: On January 1, 2014, New Country issued $200,000 of ten-year 8% bonds at 98. These bonds were…

A: Total Discount on bonds issue = Face value of bonds x (100 - bonds issue price) = $200,000 x (100% -…

Q: Sheridan Corporation retires its $540000 face value bonds at 104 on January 1, following the payment…

A: Given information,The Bonds Payable account represents the initial face value of the bonds issued by…

Q: A company previously issued $2,000,000, 10% bonds, receiving a $120,000 premium. On the current…

A: During retirement of a bond, if its book value is more than the cash paid to the bond holders it…

Q: June Company issued P4,000,000 of 8.5%, 5-year bonds on April 1, 2023. Interest payment dates are…

A: In order to raise money from investors, a company or group may issue bonds receivable in the form of…

Q: On April 30, one year before maturity, Middleton Company retired $200,000 of its 9% bonds payable at…

A: Introduction: The issuer acknowledges a loss on retirement if the price paid to retire a bond…

Q: 3. On January 1, 20x1, Hope Co. issued 5-year, 12%, P2,000,000 bonds for P2,151,632. Principal is…

A: Interest accrued on July 1, 20x3 = Face value of bonds x rate of interest x no. of months/12 =…

Q: Alvin Jackson Co. issued $10,000 of bonds on January 1, 2021. The bonds pay interest semi-annually.…

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

Q: On January 1, 2020, Naples Co. issued $280,000 of 10-year bonds at 96. The bonds pay 6% cash…

A: Total discount on bonds  retired on June 1, 2020 = Total amount of bonds issued x % of bonds retired…