On the first day of the fiscal year, a company issues a $750,000, 7%, five-year bond that pays semiannual interest of $26,250 ($750,000 x 7% x 1⁄2 ), receiving cash of $663,128. Journalize the bond issuance.

On the first day of the fiscal year, a company issues a $750,000, 7%, five-year bond that pays semiannual interest of $26,250 ($750,000 x 7% x 1⁄2 ), receiving cash of $663,128. Journalize the bond issuance.

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 the first day of its fiscal year, Chin Company issued $13,200,000 of five-year, 6% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 8%, resulting in Chin receiving cash of $12,129,308. a. Journalize the entries to record the following: Issuance of the bonds. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) If an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar. 1. 2. 3. b. Determine the amount of the bond interest expense for the first year.$ c. Why was the…
On the first day of the fiscal year, a company issues a $1,350,000, 11%, five-year bond that pays semiannual interest of $74,250 (S1,350,000 x 11% x ½), receiving cash of $1,512,610. Journalize the first interest payment and the amortization of the related bond premium. Round to the nearest dollar. Refer to the Chart of Accounts for exact wording of account titles.
On January 1, the first day of the fiscal year, Designer Fabric Inc. issues a $700,000, 5%, 10-year bond that pays semiannual interest of $17,500 ($700,000 x 5% x ½ year), receiving cash of $700,000. Journalize the entries to record (a) the issuance of the bonds, (b) the first interest payment on June 30, and (c) the payment of the principal on the maturity date of December 31 on page 11. Refer to the Chart of Accounts for exact wording of account titles. Chart of Accounts CHART OF ACCOUNTS Designer Fabric Inc. General Ledger ASSETS 110 Cash 111 Petty Cash 121 Accounts Receivable 122 Allowance for Doubtful Accounts 126 Interest Receivable 127 Notes Receivable 131 Merchandise Inventory 141 Office Supplies 191 Land 194 Office Equipment 195 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 221 Salaries Payable 231 Sales Tax Payable 232 Interest Payable 241 Notes Payable 251 Bonds…
On the first day of the fiscal year, a company issues a $1,450,000, 5%, five-year bond that pays semiannual interest of $36,250 ($1,450,000 × 5% × ½), receiving cash of $1,408,720. Journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. Refer to the Chart of Accounts for exact wording of account titles. Chart of Accounts CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 111 Petty Cash 121 Accounts Receivable 122 Allowance for Doubtful Accounts 126 Interest Receivable 127 Notes Receivable 131 Merchandise Inventory 141 Office Supplies 191 Land 194 Office Equipment 195 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 221 Salaries Payable 231 Sales Tax Payable 232 Interest Payable 241 Notes Payable 251 Bonds Payable 252 Discount on Bonds Payable 253 Premium on Bonds Payable EQUITY 311 Common Stock 312…
On the first day of the fiscal year, a company issues an $2,750,000, 8%, five-year bond that pays semiannual interest of $110,000 ($2,750,000 x 8% x ½), receiving cash of $2,938,110. Journalize the first interest payment and the amortization of the related bond premium. Round to the nearest dollar. Refer to the Chart of Accounts for exact wording of account titles. Chart of Accounts CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 111 Petty Cash 121 Accounts Receivable 122 Allowance for Doubtful Accounts 126 Interest Receivable 127 Notes Receivable 131 Merchandise Inventory 141 Office Supplies 191 Land 194 Office Equipment 195 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 221 Salaries Payable 231 Sales Tax Payable 232 Interest Payable 241 Notes Payable 251 Bonds Payable 252 Discount on Bonds Payable 253 Premium on Bonds Payable EQUITY 311 Common Stock…
On January 1, the first day of the fiscal year, a company issues a $550,000, 8%, 10-year bond that pays semiannual interest of $22,000 ($550,000 × 8% × ½ year), receiving cash of $550,000. (a) Journalize the entry to record the issuance of the bonds. fill in the blank 8dfaac02b05b066_2 fill in the blank 8dfaac02b05b066_4 (b) Journalize the entry to record the first interest payment on June 30. fill in the blank efa8e4f6603d061_2 fill in the blank efa8e4f6603d061_4 (c) Journalize the entry to record the payment of the principal on the maturity date. fill in the blank 71e811068fc505d_2 fill in the blank 71e811068fc505d_4
On the first day of the fiscal year, a company issues a $980,000, 8%, 5-year bond that pays semiannual interest of $39,200 ($980,000 × 8% × 1/2), receiving cash of $884,177. Required: Journalize the entry to record the issuance of the bonds. Refer to the Chart of Accounts for exact wording of account titles. Chart Of Accounts CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 113 Allowance for Doubtful Accounts 114 Notes Receivable 115 Interest Receivable 121 Merchandise Inventory 122 Supplies 131 Prepaid Insurance 140 Land 151 Building 152 Accumulated Depreciation-Building 153 Equipment 154 Accumulated Depreciation-Equipment LIABILITIES 210 Accounts Payable 221 Salaries Payable 231 Sales Tax Payable 241 Notes Payable 242 Interest Payable 251 Bonds Payable 252 Discount on Bonds Payable 253 Premium on Bonds Payable EQUITY 310…
On the first day of its fiscal year, Chin Company issued $15,300,000 of five-year, 8% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 9%, resulting in Chin Company receiving cash of $14,694,714.a. Journalize the entries to record the following:Issuance of the bonds.First semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.)Second semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.)For a compound transaction, if an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar. b. Determine the amount of the bond interest expense for the first year.$c. Why was the…
On January 1, the first day of the fiscal year, Designer Fabric Inc. issues a $850,000, 8%, 10-year bond that pays semiannual interest of $34,000 ($850,000 × 8% × ½ year), receiving cash of $850,000.(a) Journalize the entry to record the issuance of the bonds. If an amount box does not require an entry(b) Journalize the entry to record the first interest payment on June 30. If an amount box does not require an entry(c) Journalize the entry to record the payment of the principal on the maturity date. If an amount box does not require an entry
On the first day of the fiscal year, a company issues a $500,000, 8%, 10-year bond that pays semiannual interest of $20,000 ($500,000 x 8% x 1/2), receiving cash of $530,000. Journalize the entry for the issuance of the bonds. If an amount box does not require an entry, leave it blank. Cash
On January 1, the first day of the fiscal year, Designer Fabric Inc. issues a $5,000,000, 6%, 10-year bond that pays semiannual interest of $150,000 ($5,000,000 × 6% × ½ year), receiving cash of $5,000,000. a. Journalize the entry to record the issuance of the bonds. If an amount box does not require an entry, leave it blank. b. Journalize the entry to record the first interest payment on June 30. If an amount box does not require an entry, leave it blank. c. Journalize the entry to record the payment of the principal on the maturity date. If an amount box does not require an entry, leave it blank.
On the first day of the fiscal year, a company issues a $1,100,000, 6%, 9-year bond that pays semiannual interest of $33,000 ($1,100,000 × 6% × ½), receiving cash of $1,178,944. Journalize the bond issuance. If an amount box does not require an entry, leave it blank. Interest Expense Premium on Bonds Payable Cash