On January 31, Year 4, Yellow Corp. issued $1,000,000 of 10-year, 6% coupon bonds with interest paidtwice per year on January 31 and July 31. The market rate was 8%. Year end is December 31. OnJanuary 31, Year 5, after paying interest, Yellow Corp. retired 60% of the bonds at 91. Yellow Corp.follows IFRS.Requireda. Rounding all values to the nearest dollar, calculate the issue price of the bond.b. Prepare all journal entries for the bonds from issue to partial redemption.

Yellow Corp. Bond Accountinga) Issue Price Calculation:We can use the bond valuation formula to find…

Answered: On January 31, Year 4, Yellow Corp.…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Splish Inc. issues $3,700,000 of 7% bonds due in 12 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 10%.Click here to view factor tablesWhat amount will Splish receive when it issues the bonds? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and final answer to 0 decimal places, e.g. 458,581.) Amount received by Splish when bonds were issued
Monty Corporation issues $460,000 of 9% bonds, due in 9 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%.Click here to view factor tables.Compute the issue price of the bonds. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.) Issue price of the bonds= $
On July 1, 20X1, Mirage Company issued $250 million of bonds with an 8% coupon interest rate. The bonds mature in 10 years and pay interest semiannually on June 30 and December 31 of each year. The market rate of interest on July 1, 20X1, for bonds of this risk class was 8%. Mirage closes its books on December 31. Ignore income taxes. Use the following links to the present value tables to calculate answers. (PV of 1, PVAD of 1, and PVOA of 1) (Use the appropriate factor(s) from the tables provided.) Required: At what price were the bonds issued? On July 1, 20X3, the market interest rate for bonds of this risk class is 6%. What is the fair value of the bonds on this date? Suppose that 50% of the bonds were repurchased for cash on July 1, 20X3, at the market price. What journal entry would the company make to record this partial retirement? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate…
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Laura Hall Company issued $660,000 of 10%, 20-year bonds on January 1, 2025, at 102. Interest is payable semiannually on July 1 and January 1. Laura Hall Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of 9.7705%. Click here to view factor tables. Prepare the journal entries to record the following. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to O decimal places, eg. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) a. The issuance of the bonds. b. The payment of interest and related amortization on July 1, 2025. C The accrual of interest and the related amortization on December 31, 2025. Date Account Titles and Explanation Debit Credit
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