**Bond Issuance and Accrued Interest Calculation****Scenario:**On May 1, 2018, Green Corporation issued $1,100,000 of 12% bonds, dated January 1, 2018, for $1,074,000 plus accrued interest. The bonds mature on December 31, 2032, and pay interest semiannually on June 30 and December 31. Green's fiscal year ends on December 31 each year.**Requirements:**1. **Determine the amount of accrued interest that was included in the proceeds received from the bond sale.** 2. **Prepare the journal entry for the issuance of the bonds.****Instructions:**- To complete the questions, enter your answers in the provided tabs. **Accrued Interest Calculation:**- Use the input box to calculate the accrued interest that was included in the proceeds from the bond sale.**Tabs:**- **Required 1:** Focuses on the accrued interest calculation. - **Required 2:** Involves preparing the journal entry for the bond issuance.

Answered: Image /qna-images/answer/bd9395d8-dfa9-41ed-8009-8c8193ea538e.jpg

Answered: On May 1, 2018, Green Corporation…

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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Hasley Company issued $800,000, 11%, 10-year bonds on December 31, 2018, for $730,000. Interest is payable annually on December 31.The Company uses the straight-line method to amortize bond premium or discount.
Donner Corporation issues 4-year bonds with a face value of $5,000,000 and a stated rate of 5% on January 1, 2022. Interest is payable semiannually on June 30 and December 31. The market rate of interest is 6%. Donner's controller prepares the first two lines of the effective interest amortization table and asks you to prepare the third line. What is the company's INTEREST EXPENSE amount for this June 30, 2023 interest payment? Interest Cash Decrease Payment Date Payment Interest in Вook Amount Expense $144,735 $145,327 ???? Discount Discount Value June 30, 2022 $125,000 $125,000 $19,735 $20,327 $155,757 $4,844,243 Dec 31, 2022 $135,430 $4,864,570 June 30, 2023 Dec 31, 2023 June 30, 2024 Dec 31, 2024 June 30, 2025 Dec 31, 2025 $291,874 O $121,614 $125,000
Presented below are two independent situations: a) On December 31, 2021, Legault Corporation had $1,000,000, 8% bonds payable issued. The bonds pay interest on January 1 and June 1 of each year, and mature on January 1, 2021. On January 2, 2022, Legault redeemed 60% of these bonds at 101. The amortized cost of the entire bond issue on the retirement date was $1,026,000. The interest payment due on January 1, 2022, has been made and recorded. b) Antonio Inc. redeemed $500,000 of its bonds at 98 on December 31, 2021. The amortized cost of the bonds on the retirement date was $497,500. The bonds pay semi-annual interest and the interest payment due on December 31, 2021, has been made and recorded. Instructions For each of the independent situations, prepare the journal entry to record the retirement of the bonds
Roarie LLC issued 10,000, $1,000 bonds on January 1, 2020. The bonds have a 10-year term and pay interest semiannually. This is a partial bond amortization schedule for the bonds: Cash Payment Interest A. $4,261,329 B. $7,738,658 C. $4,000,000 D. $3,738,658 Effective Decrease in Interest Balance Disct Cash 1 200,000 313,067 113,067 2 200,000 318,720 118,720 3 200,000 324,657 124,657 4 200,000 330,889 130,889 What would be the total interest cost of the bonds over their full term? Outstanding Balance 10,000,000 (6,261,343) 3,738,658 4,000,000 7,738,658 6,261,343 6,374,410 6,493,130 6,617,787 6,748,676
Leong Corporation was authorized to issue $500,000 face value bonds on January 1, 2017. The corporation issued $100,000 of face value bonds on that date. The bonds will mature on December 31, 2020. Interest is paid semi-annually on June 30 and December 31 each year. The bond interest rate per the terms of the indenture is 12% per year. Required: Answer the questions for each of the following cases. Case A: The bonds were issued at face value. Case B: The bonds were issued for $112,000. Case C: The bonds were issued for $88,000. a. How much cash does Leong receive for the bonds? b. How much annual interest must the corporation pay? On what amount does the corporation pay? c. Prepare the journal entry to record the sale of the bonds. d. Record the entries applicable to interest and straight-line amortization for June 30, 2017 and for December 31, 2017.
Grocery Corporation received $300,328 for 11 percent bonds issued on January 1, 2021, at a market interest rate of 8 percent. The bonds had a total face value of $250,000, stated that interest would be paid each December 31, and stated that they mature in 10 years. Assume Grocery Corporation uses the effective-interest method to amortize the bond premium. Required: 1. & 2. Prepare the required journal entries to record the bond issuance and the first interest payment on December 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Round your answers to the nearest whole dollar.) 1. Record the issuance of bonds with a face value of $250,000 for $300,328. 2. Record the interest payment on December 31.
Madison Corporation is authorized to issue $570,000 of 5-year bonds dated June 30, 2019, with a stated rate of interest of 11%. Interest on the bonds is payable semiannually, and the bonds are sold on June 30, 2019. Required: Determine the proceeds that the company will receive if it sells the following: (Click here to access the tables to use with this exercise and round your answers to two decimal places, if necessary.) 1. The bonds to yield 12% $fill in the blank 1 2. The bonds to yield 10% $fill in the blank 2
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On January 1, 2025, Concord Corporation issued $500,000 of 7% bonds, due in 10 years. The bonds were issued for $537.196, 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. Concord uses the effective interest method. (Round answers to 0 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) No. (4) Date Account Titles and Explanation Debit Cred
On January 1, 2019, Langka Inc. issued 9% bonds in the face amount of P5,000,000 which mature on January 1, 2019. The bonds were issued for P4,695,000 to yield 10%. Interest is payable annually on December 31. The entity used the interest method of amortizing bond discount. What is the carrying amount of the bonds on January 1, 2019?
On July 1, 2018, 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 July 1 and January 01. The company uses the effective-interest method of amortization. Required: For ABC Co. answer the following independent requirements: JORARE STON a. Prepare the necessary journal entry on July 1, 2018. b. Assume that the accounting date for ABC Co. is December 31, prepare journal entry on December 31, 2018. cessary c. Assume that the bond was issued on September 30, 2018, prepare the journal entry on January 01, 2019. d. Assume that the accounting date for ABC Corporation is November 30, prepare the journal entry on November 30, 2018.
On January 1, 2025, Entity D issued $1,000,000 of 7%, 5-year bonds at 98. The bonds pay interest annually on December 31 and Entity D amortizes any premium or discount using the straight-line method. What is the annual interest expense on the bonds? $66,000. $74,000. $4,000. $70,000.

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