On June 1, $40,000 of bonds were purchased between interest dates. The brokerage commission was $600. The bonds pay interest at12%, which is paid semiannually on January 1 and July 1. How much interest revenue will be recorded on July 1?Oa. $2,000Ob. $2,400Oc. $406Od. $400

Bonds were purchased on June 1. Interest was received on July 1. From June 1 to July 1 = 1 month…

Answered: On June 1, $40,000 of bonds were…

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, 2012 Zesto Company received $1,032,880 for $1,000,000 face amount, 12% bonds, a price that yields 10%. Interest is payable semi-annually every June 30 and December 31. Interest expense for the year ended December 31, 2012 is a.$123,946 b.$120,000 c.$103,288 d.$102,870
Medhurst Corporation issued $89,000 in bonds for $86,000. The bonds had a stated rate of 8% and pay interest quarterly. What is the journal entry to record the first interest payment? If an amount box does not require an entry, leave it blank.
Lunar Corporation issued $80,000 in bonds for $87,000 on Jan. 1. The bonds had a stated rate of 8% and pay interest quarterly. What is the journal entry to record the first interest payment?
A company issues $50,000 of 4% bonds, due in 5 years, with interest payable semiannually. Assuming a market rate of 3%, the bonds issue for $52,306. Calculate interest expense as of the first semiannual interest payment.a. $1,570.b. $1,000.c. $785.d. $375.
Jan 1, 16, Google issues 3,000 of its 10%, 1,000 bonds for 3,120,000. These bonds were to mature on Jan 1,26 . Interest was payable semiannually on July 1 & Jan 1. Bond premium was amortized on straight line basis. 1. What is the carrying amount of the debt on July 1, 21? 2. What is the journal entry that would be made on dec. 31, 21
$70,000 worth of 5 year bonds were issued on January 1st with a contract rate of 5% and market rate of 6%. Interest is paid semiannually. Calculate the amount of interest paid to bondholders on July 1st. $4.200 O 31,750 $3.500 O $2,100
Diana Inc. issued $300,000 of its 5%, 5-year bonds for $287,215 when the market rate was 6%. The bonds pay interest semi-annually. Prepare an amortization table for the first three payments. Round intermediate and final answers to whole dollar amount. Cash Interest Interest on Amortization of Payment Carrying Value Discount Carrying Value Jan. 1. Year 1 June 30, Year 1 Dec. 31, Year 1 June 30, Year 2
Un the first day of the current fiscal year, $2,000,000 of 10-year, 7% bonds, with interest payable annually, were sold for $2,125,000. Present the journal entries to record each of the following transactions for the current fiscal year: (a) Issuance of the bonds. Date Account DR CR (b) First annual interest payment on Dec. 31 (record as separate entry from premium amortization). Date Account DR CR (c) Amortization of bond premium for the year, using the straight-line method. Date Account DR CR
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.
On January 1, a company issues bonds dated January 1 with a par value of $350,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $335,819. The journal entry to record the first interest payment using straight-line amortization is: Multiple Choice Debit Interest Expense $10,831.90; debit Discount on Bonds Payable $1,418.10; credit Cash $12,250,00 Debit Interest Expense $13,668.10, credit Discount on Bonds Payable $1,418.10, credit Cash $12,250.00 Debit Interest Expense $12,250.00, credit Cash $12.250.00 Debit interest Expense $13,668.10; credit Premium on Bonds Payable $1,418.10; credit Cash $12,250,00 Debit interest Payable $12.250.00; credit Cash $12.250.00
On Jan. 1, Year 1, Foxcroft Inc. issued 110 bonds with a face value of $920 for $105,200. The bonds had a stated rate of 10% and paid interest semi-annually. What is the journal entry to record the issuance of the bonds? If an amount box does not require an entry, leave it blank. Jan. 1 fill in the blank 2 fill in the blank 3 fill in the blank 5 fill in the blank 6 fill in the blank 8 fill in the blank 9
What account would be debited (1), what account would be credit (2), and what amount would be paid to record the journal entry for each interest payment based on a $200,000 five-year, 10% bond and the bond was issued at $192,462 (11%) and interest is paid semiannually? JOURNAL Page 25 DATE DESCRIPTION P.REF. DEBIT CREDIT (1) ? (2) ? (1) Interest Expense debit $11,000, and (2) Cash credit $11,000 (1) Interest Expense debit $10,000 and (2) Cash credit $10,000 (1) Cash debit $20,000 and (2) Interest Expense credit $20,000 (1) Cash debit $22,000, and (2) Interest Expense credit $22,000

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS

On June 1, $40,000 of bonds were purchased between interest dates. The brokerage commission was $600. The bonds pay interest at 12%, which is paid semiannually on January 1 and July 1. How much interest revenue will be recorded on July 1? Oa. $2,000 Ob. $2,400 Oc. $406 Od. $400