On June 30, 2017, ABC Co. issued $6,000,000, 6%, 4-year bonds. The bonds were sold to yield an effective-interest rate of 8%. Interest is paid semiannually on June 30 and December 31. The company uses the effective-interest method of amortization. Required: For ABC Co. answer the following independent requirements: a. Prepare the necessary journal entry on June 30, 2017. b. Prepare the necessary journal entry on December 31, 2017. c. Assume that the bond was issued on August 31, 2017, prepare the journal entry on December 31, 2017. d. Assume that the accounting date for ABC Corporation is October 31, prepare the journal entry on October 31, 2017. ORGARE

On June 30, 2017, ABC Co. issued $6,000,000, 6%, 4-year bonds. The bonds were sold to yield an effective-interest rate of 8%. Interest is paid semiannually on June 30 and December 31. The company uses the effective-interest method of amortization. Required: For ABC Co. answer the following independent requirements: a. Prepare the necessary journal entry on June 30, 2017. b. Prepare the necessary journal entry on December 31, 2017. c. Assume that the bond was issued on August 31, 2017, prepare the journal entry on December 31, 2017. d. Assume that the accounting date for ABC Corporation is October 31, prepare the journal entry on October 31, 2017. ORGARE

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

Ivanhoe Company issued $2,900,000 of 10%, 10-year bonds on January 1, 2017, at 102. Interest is payable semiannually on July 1 and January 1. Ivanhoe Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of 9.6833%. Prepare the journal entries to record the following. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) (a) The issuance of the bonds. (b) The payment of interest and related amortization on July 1, 2017. (c) The accrual of interest and the related amortization on December 31, 2017. Date Account Titles and Explanation Debit Credit (a) 1/1/17 (b) 7/1/17 (c) 12/31/17
Ivanhoe Company issued $459,000, 8%, 30-year bonds on January 1, 2017, at 103. Interest is payable annually on January 1. Ivanhoe uses straight-line amortization for bond premium or discount.Prepare the journal entries to record the following events. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) The issuance of the bonds. (b) The accrual of interest and the premium amortization on December 31, 2017. (c) The payment of interest on January 1, 2018. (d) The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. No. Date Account Titles and Explanation Debit Credit (a) Jan. 1, 2017 enter an account title to record the issuance of the bonds on January 1, 2017 enter a debit amount enter a credit amount enter an account title to record the issuance of the bonds on January 1, 2017 enter a debit amount…
Adcock Company issued $276,000, 8%, 20-year bonds on January 1, 2015, at 105. Interest is payable semiannually on July 1 and January 1. Adcock uses straight-line amortization for bond premium or discount. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1, 2015 Prepare the journal entry to record the payment of interest and the premium amortization on July 1, 2015, assuming that interest was not accrued on June 30. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1, 2015 Prepare the journal entry to record the accrual of…
Crane Company issued $516,000 of 10%, 20-year bonds on January 1, 2020, at 102. Interest is payable semiannually on July 1 and January 1. Crane Company uses the straight-line method of amortization for bond premium or discount. Prepare the journal entries to record the following. (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 amount is entered. Do not indent manually.) (a) The issuance of the bonds. (b) The payment of interest and the related amortization on July 1, 2020. (c) The accrual of interest and the related amortization on December 31, 2020. Date Account Titles and Explanation Debit Credit 1/1/20 Cash Bonds Payable 516,000 Premium on Bonds Payable 7/1/20 Interest Expense Premium on Bonds Payable Cash 12/31/20 Interest Expense Premium on Bonds Payable Interest Payable
On January 1, 2021, Solo Securities issued a $600, 000, 6%, three-year bonds payable. The market rate was 4% at issuance. Interest is paid semi-annually each June 30 and December 31. Solo Securities uses the effective interest method of amortization. create amortization table
Helen Martin Company issued $576,000 of 10%, 20-year bonds on January 1, 2025, at 103. Interest is payable semiannually on July 1 and January 1. Martin Company uses the straight-line method of amortization for bond premium or discount. Prepare the journal entries to record the following. (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. b. C. The issuance of the bonds. The payment of interest and the related amortization on July 1, 2025. The accrual of interest and the related amortization on December 31, 2025. Date Account Titles and Explanation Debit Credit
Pharoah Company issued $2,400,000 of 10%, 10-year bonds on January 1, 2017, at 104. Interest is payable semiannually on July 1 and January 1. Pharoah Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of 9.3750%.Prepare the journal entries to record the following. The issuance of the bonds.(b)The payment of interest and related amortization on July 1, 2017.(c)The accrual of interest and the related amortization on December 31, 2017.
On January 1, 2019, Rodgers Company purchased $200,000 face value, 10%, 3-year bonds for $190,165.35, a price that yields a 12% effective annual interest rate. The bonds pay interest semiannually on June 30 and December 31. Required: 1. Record the purchase of the bonds. 2. Prepare an investment interest income and discount amortization schedule using the effective interest method. 3. Record the receipts of interest on June 30, 2019, and June 30, 2021.
Hillside issues $1,000,000 of 6%, 15-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $864,113. Required:4. Prepare the first two years of a straight-line amortization table.5. Prepare the journal entries to record the first two interest payments.
Carla Corporation issued $396,000 of 7% bonds on May 1, 2025. The bonds were dated January 1, 2025, and mature January 1, 2028, with interest payable July 1 and January 1. The bonds were issued at face value plus accrued interest. Prepare Carla's journal entries for (a) the May 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. (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) No. (a) (b) (c) Date May 1, 2025 Dec 31, 2025 July 1, 2025 Account Titles and Explanation Debit Credit SUPPO
Pretzelmania, Incorporated, issues 7%, 10-year bonds with a face amount of $61,000 for $61,000 on January 1, 2024. Interest is paid semiannually on June 30 and December 31. Required: 1. & 2. Record the bond issue on January 1, 2024 and first interest payment on June 30, 2024. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
Aggies Inc. issued bonds with a $450,000 face value, 8% interest rate, and a 4-year term on July 1, 2018, and received $510,000. Interest is payable semi-annually. The premium is amortized using the straight-line method. A. July 1, 2018: entry to record issuing the bonds B. Dec. 31, 2018: entry to record payment of interest to bondholders C. Dec. 31, 2018: entry to record amortization of premium Prepare journal entries for the above transactions. If an amount box does not require an entry, leave it blank. A. 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 B. fill in the blank 11 fill in the blank 12 fill in the blank 14 fill in the blank 15 C.