On June 30, 2024, Single Computers issued 6% stated rate bonds with 2039 (15 years). The market rate of interest for similar bond issues was 5% (2.5% semiannual rate). Interest is paid semiannually (3.0%) on June 30 and December 31, beginning on December 31, 2024. Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1, EVA of $1. PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Determine the price of the bonds on June 30, 2024. 2. Calculate the interest expense Single reports in 2024 for these bonds using the effective interest method. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the interest expense Single reports in 2024 for these bonds using the effective interest method. Note: Enter all the values as positive value. Round your final answers to nearest whole dollar amount, not in millions.

On June 30, 2024, Single Computers issued 6% stated rate bonds with 2039 (15 years). The market rate of interest for similar bond issues was 5% (2.5% semiannual rate). Interest is paid semiannually (3.0%) on June 30 and December 31, beginning on December 31, 2024. Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1, EVA of $1. PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Determine the price of the bonds on June 30, 2024. 2. Calculate the interest expense Single reports in 2024 for these bonds using the effective interest method. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the interest expense Single reports in 2024 for these bonds using the effective interest method. Note: Enter all the values as positive value. Round your final answers to nearest whole dollar amount, not in millions.

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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On January 1, 2024, Cool Universe issued 10% bonds dated January 1, 2024, with a face amount of $20.1 million. The bonds mature in 2033 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. 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) Required: 1. Determine the price of the bonds on January 1, 2024. 2. Prepare the journal entry to record the bond issuance by Cool on January 1, 2024. 3. Prepare the journal entry to record interest on June 30, 2024, using the straight-line method. 4. Prepare the journal entry to record interest on December 31, 2024, using the straight-line method. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 4 Check n Determine the price of the bonds on January 1, 2024. Note: Enter your answers in whole dollars not in millions (l.e., 1,000,000 not 1). Round your intermediate…
On December 31, 2024, when the market interest rate is 8%, McMann Realty issues $700,000 of 5.25%, 10-year bonds payable. The bonds pay interest semiannually. Determine the present value of the bonds at issuance. (Round all currency amounts to the nearest whole dollar) (Click the icon to view Present Value of $1 table.) (Click the icon to view Future Value of $1 table.) The present value of the bonds at issuance amounts to (Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of Ordinary Annuity of $1 table.) EXE
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 7% and the bonds issue at a discount.2a. Calculate the issue price of a bond.2b. Complete the first three rows of an amortization schedule. (FV of $1, PV of $1, FVA of $1, and PVA of $1)
Discount-Mart issues $12 million in bonds on January 1, 2024. The bonds have a ten-year term and pay interest semiannually on June 30 and December 31 each year. Below is a partial bond amortization schedule for the bonds: Date 01/01/2024 06/30/2024 12/31/2024 06/30/2025 12/31/2025 Interest Expense $600,000 $637,417 HIT 639,662 642,041 644,564 Cash Paid 600,000 600,000 Increase in Carrying Value 600,000 $37,417 39,662 42,041 44,564 Carrying Value $10,623,609 10,661,026 10,700,688 10,742,729 10,787,293 What is the stated annual rate of interest on the bonds? (Hint: Be sure to provide the annual rate rather than the six-month rate.) (Do not round your intermediate calculations.)
An accounting example: Otter Products inc issued bonds on January 1, 2019. Interest to be paid semi-annually. Term in years is 2; Face value of bonds issued is $200,000; Issue Price $206,000; Specified Interest Rate each payment period is 6% Question. Calculate a. the amount of interest paid in cash every payment period. b. The amount of amortization to be recorded at each interest payment date (use straight-line method) c. complete amoritzation table by calculating interest expense and beginning and ending bond carrying amounts at the each period over 2 years. The term is for 2 years however 3 years is showing on the workbook. How do I calcuate the 3rd year if the problem only says the term is 2 years?
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Your answer is partially correct. Swifty Ltd. issued a $1,184,000, 10-year bond dated January 1, 2023. The bond was sold to yield 12% effective interest. The bond paid 10% interest on January 1 and July 1 each year. The company's year-end was December 31, and Swifty followed IFRS. Using 1. factor Tables 2. a financial calculator, or 3. Excel function PV, calculate the amount received for the bond, and any discount or premium on the bond.
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On January 1, Nic Inc. issued $100,000 of ten-year, 10% bonds that pay interest semiannually on June 30 and 31st. The bonds are sold to yield 8%. A. Using the information provided in this problem, as well as your time value of money tables to calculate the issue price of the bond. B. Was the bond issued at a premium or a discount, explain your answer.
On June 30, 2024, Single Computers issued 6% stated rate bonds with a face amount of $200 million. The bonds mature on June 30, 2039 (15 years). The market rate of interest for similar bond issues was 5% (2.5% semiannual rate). Interest is paid semiannually (3%) on June 30 and December 31, beginning on December 31, 2024. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Required: 1. Determine the price of the bonds on June 30, 2024. 2. Calculate the interest expense Single reports in 2024 for these bonds using the effective interest method.
On January 1, 2022, Nuptam Corp. issued $1,300,000 par value, 8%, 3-year bonds when the market rate of interest was 10%. Interest is payable annually each December 31. Nuptam incurred bond issue costs of $22,000. What is the journal entry when Nuptam issued the bonds? Prepare the amortization table for the bonds. Future Value of $1 table Future Value of an Ordinary Annuity table Future Value of an Annuity Due table Present Value of $1 table Present Value of an Ordinary Annuity table Present Value of an Annuity Due table What is the journal entry when Nuptam issued the bonds? (Record debits first, then credits. Exclude explanations from any journal entries.) January 1, 2022 Account Cash Discount on Bonds Payable Bonds Payable