I.On June 1, 2018, Ken Company sold $200,000 in long-term bonds for $175,520. Thebonds have a stated interest rate of 8% and a yield of 10%. Maturity of the bonds is 10www myears and payment of interest is annually, on May 31 of each year.Required:a. Construct a bond amortization table for the first four years.b. Prepare the adjusting entry to be recorded on December 31, 2020.

a.Bond Amortization table for first 4 year Period Ending Beginning of Period Net Book Value…

On June 1, 2018, Ken Company sold $200,000 in long-term bonds for $175,520. The bonds have a stated interest rate of 8% and a yield of 10%. Maturity of the bonds is 10 years and payment of interest is annually, on May 31 of each year. Required: a. Construct a bond amortization table for the first four years. b. Prepare the adjusting entry to be recorded on December 31, 2020.

On June 1, 2018, Ken Company sold $200,000 in long-term bonds for $175,520. The bonds have a stated interest rate of 8% and a yield of 10%. Maturity of the bonds is 10 years and payment of interest is annually, on May 31 of each year. Required: a. Construct a bond amortization table for the first four years. b. Prepare the adjusting entry to be recorded on December 31, 2020.

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, 2018, Lane Unlimited issues 15%, 10-year bonds payable with a face value of $180,000. The bonds are issued at 105 and pay interest on June 30 and December 31. Requirements: Journalize the semiannual interest payment and amortization of bond premium on December 31, 2018. Journalize the retirement of the bond at maturity, assuming the last interest payment has already been recorded. (Give the date.)
On July 1, 2018, Volunteer Inc. issued bonds with a $500,000 face value at 108.0 and the 5-year bonds have a 10% interest rate in a market with a rate of 8%. Interest is payable annually and the effective-interest method is used for amortization. Prepare journal entries for the following transactions.
On January 1, 2019, JWS Corporation issued $600,000 of 7% bonds,due in 10 years. The bonds were issued for $559,224, and pay interest each July 1and January 1. Prepare the company's journal entries for (a) the January 1issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry.Assume an effective-interest rate of 8%.
On January 1, 2020, Grouper Corporation issued $480,000 of 7% bonds, due in 10 years. The bonds were issued for $515,707, and pay interest each July 1 and January 1. The effective-interest rate is 6%.Prepare the company’s journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Grouper uses the effective-interest method
Duval Co. issues four-year bonds with a $108,000 par value on January 1, 2019, at a price of $103,920. The annual contract rate is 6%, and interest is paid semiannually on June 30 and December 31. Prepare a straight-line amortization table for these bonds. (Round your answers to the nearest dollar amount.)
57 On January 1, 2024, Reyes Recreational Products issued $100,000, 11%, four-year bonds. Interest is paid semiannually on June 30 and December 31. The bonds were issued at $96,895 to yield an annual return of 12%. Required: 1. Prepare an amortization schedule that determines interest at the effective interest rate. 2. Prepare an amortization schedule by the straight-line method. 3. Prepare the journal entries to record interest expense on June 30, 2026, by each of the two approaches. 5. Assuming the market rate is still 12%, what price would a second investor pay the first investor on June 30, 2026, for $12,000 of the bonds? Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1. FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 5 Prepare an amortization schedule that determines interest at the effective interest rate. Note: Enter your answers in whole dollars.…
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.
On January 1, 2018, Paradiso Company issued 1,000 of its 8%, $1,000 bonds at 93. Interest is payable semiannually on June 30 and December 31. The bonds will mature on December 31, 2027. If the company uses straight-line amortization, determine the amount of interest expense for 2018. answer is 87,000 how do you get there?
Ellis Company issues 8.5 %, five - year bonds dated January 1, 2021, with a $540,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $550, 969. The annual market rate is 8.0% on the issue date. Required: Compute the total bond interest expense over the bonds' life. Prepare an effective interest amortization table for the bonds' life. Prepare the journal entries to record the first two interest payments.
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 5% and the bonds issue at a premium. 3a. Calculate the issue price of a bond.3b. Complete the first three rows of an amortization schedule. (FV of $1, PV of $1, FVA of $1, and PVA of $1)
Duval Co. issues four-year bonds with a $109,000 par value on January 1, 2019, at a price of $104,910. The annual contract rate is 5%, and interest is paid semiannually on June 30 and December 31. Prepare the journal entry for maturity of the bonds on December 31, 2022 (assume semiannual interest is already recorded).
On January 1, 2024, Splash City issues $500,000 of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. The market interest rate on the issue date is 10% and the bonds issued at $457,102. Required: 1. Using an amortization schedule, show that the bonds have a carrying value of $458,633 on December 31, 2025. (Round your final answers to nearest whole dollar.)