18. On July 01, 2019, SALUDORAW SA'YO SI MAGELLAN SABINI LOLA CO. receivedP1,032,880 for P1,000,000face amount, 12% bonds,price that yields 10%. Usingthe interest method ofamortization, how much is theinterest expense for the sixmonths ended December 31,2019? *а. Р61,973ОБ. Р60,000с. Р51,644O d. P50,000 19. Use the same information inMC 18. What is the bondcarrying value at December 31,2019? *O a. P1,024,524O b. P1,031,236O c. P1,032,880O d. P1,041,236

Solution 18: Interest expense for first six months = Issue price * 10% *6/12 = 1032880 *10%*6/12 =…

Answered: P1,032,880 for P1,000,000 face amount,…

P1,032,880 for P1,000,000 face amount, 12% bonds, a price that yields 10%. Using the interest method of amortization, how much is the interest expense for the six

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Joe Levi bought a home in Arlington, Texas, for $126,000. He put down 30% and obtained a mortgage…

A: The question is based on the concept of Annuity in Financial Management. Annuity refers to the…

Q: 21. On January 01, 2019, SUNOD NA ANG LEASES LTD. issued 3- year bonds with face value of P5,000,000…

A: Given: Face value = P5,000,000 Price = 99% Nominal rate = 10% Issue cost = P150,000

Q: < On December 31, 2024, when the market interest rate is 12%, McCann Realty issues $900,000 of 13 25…

A: The company issues bonds when it wants to raise debts. The company makes the cash payment for…

Q: On January 1, 2021, Ruzak Co. sold five-year, 6% bonds with a face value of $700,000. Interest is…

Q: A $100,000, 5% bond is redeemable at 110% at the end of 15 years, anddividendsarepayableannually.…

A: Companies issue bonds to meet the demand of the financing, it can be issued at par, discount, or…

Q: On January 1, 2024, Oriole Co. sold 12% bonds with a face value of $2650000. The bonds mature in…

A: Face value $ 2,650,000Coupon rate12.00%per yearEffective rate10.00%per yearCarrying value as on…

Q: Marwick Corporation issues 8%, 5 year bonds with a par value of $1,200,000 and semiannual interest…

A: Interest rate on bond : 8/2= 4% ( Divided by 2 because it is mentioned semiannual interest ) Time =…

Q: Completing an Amortization Table (Straight Line) Richter Corporation sold $180,000 face value of…

A: Bond :— It is one of the type of securities that pays fixed periodic interest and par value at the…

Q: (a) Prepare an amortization table for these bonds; use the straight-line method to amortize the…

A: Bond is the instrument offered by the organization in return of interest rate which is usually…

Q: Part A On January 1, 2022, East Pacific Enterprises issued 9%, 10-year bonds with a face amount of…

A: The objective of this question is to prepare an amortization table for the first three payment…

Q: P5000.00, 10-year, 8% bond that pays interest annually was purchased four years ago with a discount…

A: Rate of return to investor will be IRR (internal rate of return). IRR is the rate at which present…

Q: On 1 January 2010, Quanta Services Inc. issues £1,000,000 face value, five-year bonds with annual…

A: Concept:The practice of accounts used in discounting the bond is called an effective interest…

Q: Daniel and Jan agreed to pay $545,000 for a four-bedroom colonial home in Waltham, Massachusetts,…

A: The question is based on the concept of Annuity in Financial Management. Annuity refers to the…

Q: Garcia Company issues 10%, 15-year bonds with a par value of $340,000 and semiannual interest…

A: Premium on bonds payable: Premium on bonds payable refers to the amount by which the issue price of…

Q: A $12 000, 8.9% bond is purchased 7 years before maturity to yield 5.8% compounded semi- annually.…

A: Face Value = 12,000 Semi Annual Interest Payments and compounding therefore time period will be…

Q: WholeGoods issue $760,000 of it's 20 year 8% bonds. The bonds were priced to yield 10%. WholeGoods…

A: A journal entry is a form of accounting entry that is used to report a business transaction in a…

Q: Q10

A: 1.Prepare amortization schedule:

Q: 17. On January 01, 2019, IDAMAY KO NA RIN PO SI PAPA CO. issued 10-year bonds with a face amount of…

A: Solution: Chart Values are based on: n= 10 i= 10% Cash Flow Table Value *…

Q: A company has issued a $20,000, 10 year bond. Each bond pays interest quarterly of 2%. Determine the…

A: Given:

Q: A8.000, S% bond redeemable at par wth interest payabie annualy is bough 12 years before matuty…

A: a. given, coupon rate =5% r=6% par=1000 n=12

Q: In 2022, Dvorak Company issued $200,000 of bonds for $189,616. If the stated rate of interest was 6%…

A: Note: Under effective interest method, interest expense is calculated by multiplying the yield or…

Q: Oriole SpA issued €400,000, 7%, 20-year bonds on January 1, 2020, for €360,727. This price resulted…

A: Effective Interest Method: It is an accounting method that helps in calculating the discount on…

Q: Fill in the missing amounts.

A: Bonds payable is the amount that is considered as liability on which the company would require to…

Q: On January 01, 2019, IDAMAY KO NA RIN PO SI PAPA CO. issued 10-year bonds with a face amount of P1…

A: Solution Chart Values are based on: n= 10 i= 10% Cash Flow Table Value *…

Q: On July 1, 2019, Fewa Company issued P4,000,000 of 16% bonds to yield 14%. Interest is payable…

Q: On November 1, 2022, Dayrit Corporation purchased P800,000 face value, 10-year, 8% term bonds dated…

A: The bonds are issued by a company in order to fulfill its financial needs. These are classified as…

Q: On January 1, 2019, Bee Corp. issued 8-year bonds with a principal value of $3,400,000 and a stated…

A: When the stated rate of interest of 8% is less than the market rate of interest of 10%, the bonds…

Q: 12A. On December 31, 2025, when the market interest rate is 14%, Arnold Corporation issues $150,000…

A: The information given are as follows:Market Rate of interest per semi-annual period = 14%/2 = 7%No.…

Q: On January 1, 2024, Lakeside Amusement Park issues $660,000 of 5% bonds, due in 20 years, with…

A: Bond valuation is the process of determining the fair value or price of a bond, which is a debt…

Q: j) If they use effective interest amortization, how much of the discount (or premium) will they…

A: The effective interest method of amortization determines the portion of interest expense and…

Q: In January 1 20x1 abc company issued a 1000000 10 year bond with a stated interest rate of 9%…

A: Bonds :Bonds is a long-term debts issued by the government and companies to raise funds for their…

Q: On January 1, 2021, Braburt Co. sold six-year, 5% bonds with a face value of $700,000. Interest is…

A: Introduction:- A bond is a document of the bond issuer's obligation to the bondholders. Municipal…

Q: Sander Corporation issues a P300,000, 16 percent, 10-year bond at 108. REQUIREMENTS: (a) What is…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: On June 30, 2025, Daniel Jackson Company issued $3,990,000.00 face value of 14%, 20-year bonds at…

A: Bond :— It is one of the type of securities that pays fixed periodic interest and face value amount…

Q: ABC Corp receives a 4 year P400,000 non interest bearing note that requires 4 equal annual…

A: Non Interest bearing note is a type of note which has no stated interest.

Q: On January 1, 2019, $40 million face amount of 5%, 20-year bonds were issued. The bonds pay interest…

A: Introduction: Interest: Interest is calculated on Principal Amount. Interest is calculated…

Q: A $ 25, 000, 5% bond payable semi-annually is purchased seven years before maturity. Calculate the…

A: Solution:- Bonds are the securities issued by the corporations and governments, under which the…

Q: Company A has issued $2 million (notional principal) in five-year bonds with a floating (variable)…

A: Interest is the amount paid to the lender by the borrower as a fee for the money borrowed. Interest…

Q: An 8%, P1,000 bond issued to yield 10% has 6 years remaining in its term. The bond pays interest…

A: The carrying amount of bond refers to the net amount of the bond's face value after considering an…

Q: 1. On June 1, 2019, Everly Bottle Company sold $3,000,000 in long-term bonds for $2,631,300. The…

A: Bonds payable refers to a type of long-term debt that a company or organization issues to borrow…

Q: ABC Corporation's charter authorized 120,000 shares of common stock, par $10. During the first year,…

A: STATEMENT OF SHAREHOLDERS EQUITYStatement of Shareholders Equity is also Known as Changes in…

Q: If you buy a home with less than 20% down, you will pay an additional monthly fee, PMI (private…

A: 1- Monthly payment plus PMI= $1836.47 2- Yes, he has reached 20% equity. Please see the explanation…

Q: On 1 January 2022, Belize Social Security Board (SSB) issued 10% bonds with a face value of…

A: Bond interest expense is calculated on beginning carrying value of the bonds for every payment…

Q: n June 30, 2022 Maxim Corp purchased 7%, $100,000 10 year bonds. Interest is paid annually on Dec…

A: Bond is that debt instrument which is used by the organization to finance its long term fund needs,…

Question

18. On July 01, 2019, SALUDO
RAW SA'YO SI MAGELLAN SABI
NI LOLA CO. received
P1,032,880 for P1,000,000
face amount, 12% bonds,
price that yields 10%. Using
the interest method of
amortization, how much is the
interest expense for the six
months ended December 31,
2019? *
а. Р61,973
ОБ. Р60,000
с. Р51,644
O d. P50,000

19. Use the same information in
MC 18. What is the bond
carrying value at December 31,
2019? *
O a. P1,024,524
O b. P1,031,236
O c. P1,032,880
O d. P1,041,236

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Problem #2 WAPA issued $15,000,000, 7.8%, 20-vear bonds to vield 9% on January 1, 2020. Interest is paid on June 30 and December 31. The proceeds from the bonds are $14.233,448. Using effective-interest amortization, answer the following questions: (2a) Complete the following chart: Discount Amort. Carrying Amo Dates Cash Paid Interest Expense Jan 1, 2020 June 30, 2020 December 31, 2020 June 30, 2021 December 31, 2021 (2b) Provide the journal entry on for December 2021:
Dexter Inc. has $1,000,000 in face value bonds with a 6% stated interest rate outstanding. The bonds have a current carrying value of $990, 000 and an effective interest rate of 7%. Interest expense for the next semi-annual interest payment is Question 7 options: $29, 700 $30,000 $34, 650 $35,000
In January 1 20x1 abc company issued a 1000000 10 year bond with a stated interest rate of 9% payable annually every December 31st the market interest rate is 7% the bonds price is 1140160.
3
On January 1, 2021, LMN Company issued 10-year bonds with a face amount of P3,000,000 at a stated interest rate of 8% payable annually on January 1. The bonds were priced to yield 10%. Present value factors are as follows: Present value of P1 for 10 periods Present value of an ordinary annuity of P1 for 10 periods At 8%. 0.46326.7101 At 10%0.38556.1446 The total issue price of the bonds was:
4. What is the carrying value of the bonds at the end of the second period (third number)? Premium 57,913.01 Carrying value (bonds) 432,913.01 Face Rate Market Rate Semiannual payments a. b. Cash Payment C. d. e. 14% 10% 0 or 1 2 or 3 4 or 5 6 or 7 8 or 9 Interest Expense Today Period #1 26,250.00 Period #2 26,250.00 Carrying value at end of second period (third number) ___________?__ 2. Disc. or Prem. Amort. 21,645.65 21,415.43 Disc. or Prem. 4,604.35 4,834.57 57,913.01 53,308.66 48,474.10 Face Value 375,000.00 375,000.00 375,000.00 Carrying Value 432,913.01 428,308.66 423,474.10
An FI purchases a $9.982 million pool of commercial loans at par. The loans have an interest rate of 8 percent, a maturity of five years, and annual payments of principal and interest that will exactly amortize the loan at maturity. What is the duration of this asset? A. 2.122822 years. B. 3.072837 years. C. 3.528992 years. D. 2.846472 years. E. 5.000000 years.
26. Bonds Issued at a Premium (Effective Interest) Charger Battery issued $100,000 of 11%, seven-year bonds on December 31, 2022, for $104,868. Interest is paid annually on December 31. The market rate of interest is 10%. Required: Prepare the amortization table using the effective interest rate method. For those boxes in which no entry is required, leave the box blank. If the amount is zero, enter "0". If required, round your answers to the nearest whole dollar.
Requirement 1. Determine the present value of 10-year bonds payable with face value of $93,000 and stated interest rate of 12%, paid semiannually. The market rate of interest is 12% at issuance. (Round intermediary calculations and final answer to the nearest whole dollar.) 1. Determine the present value of 10-year bonds payable with face value of $93,000 and stated interest rate of 12%,paid semiannually. The market rate of interest is 12%at issuance. 2. Same bonds payable as in Requirement 1, but the market interest rate is 16%. 3. Same bonds payable as in Requirement 1, but the market interest rate is 8%.
Sh12
INVESTMENT AT AMORTIZED COST CASE III: On January 1, 2026, ABC purchased 9% bonds with a face amount of P4M to yield 10%. The bonds are dated January 1, 2026, 2024, mature on December 31, 2035 and pay interest annually on December 31. The entity used the interest method. What should be reported as interest revenue for 2026?
Mr