On January 1, 2015, Solis Co. issued its 10% bonds in the face amount of $3,000,000, which mature onJanuary 1, 2020. The bonds were issued for $3,405,000 with a rate of 8% and market rate of 5.5%,resulting in bond premium of $405,000. Solis uses the effective - interest method of amortizing bondpremium. Interest is payable quarterly. Record the appropriate journal entries if you knew that they made allthe interest payments for 2015 and prepare the amortization schedule. [Hint: watch out for the paymentdates].

A bond is an instrument that is a type of loan given by an investor to a borrower. It gives a fixed…

Answered: premium. Interest is payable quarterly.…

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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Required information [The following information applies to the questions displayed below.] At the end of 2025, the following information is available for Great Adventures. • Additional interest for five months needs to be accrued on the $36,000, 6% note payable obtained on August 1, 2024. Recall that annual interest is paid each July 31. • Assume that $12,000 of the $36,000 note discussed above is due next year. Record the entry to reclassify the current portion of the long-term note. • By the end of the year, $20,000 in gift cards have been redeemed. The company had sold gift cards of $25,300 during the year and recorded those as Deferred Revenue. • Great Adventures is a defendant in litigation involving a biking accident during one of its adventure races. The company believes the likelihood of payment occurring is probable, and the estimated amount to be paid is $15,000. • For sales of MU watches, Great Adventures offers a warranty against defect for one year. At the end of the year,…
Required information [The following information applies to the questions displayed below.] At the end of 2025, the following information is available for Great Adventures. • Additional interest for five months needs to be accrued on the $36,000, 6% note payable obtained on August 1, 2024. Recall that annual interest is paid each July 31. • Assume that $12,000 of the $36,000 note discussed above is due next year. Record the entry to reclassify the current portion of the long-term note. • By the end of the year, $20,000 in gift cards have been redeemed. The company had sold gift cards of $25,300 during the year and recorded those as Deferred Revenue. • Great Adventures is a defendant in litigation involving a biking accident during one of its adventure races. The company believes the likelihood of payment occurring is probable, and the estimated amount to be paid is $15,000. • For sales of MU watches, Great Adventures offers a warranty against defect for one year. At the end of the year,…
Compute the amount of interest on $8350 at 6.5% p.a. from October 8, 2019, to August 4, 2020. What rate of interest is paid if the interest on a loan of $12500 is $196.06 from November 14, 2019, to May 20, 2020? Loan payments of $1725 due today, $510 due in 75 days, and $655 due in 323 days are to be combined into a single payment to be made 115 days from now. What is that single payment if money is worth 8.5% p.a. and the focal date is 115 days from now? What principal will earn $355.99 interest at 9.75% p.a. from February 4, 2017, to July 6, 2017? Determine the face value of a four-month promissory note dated May 20, 2018, with interest at 7.5% p.a. if the maturity value of the note is $1190.03. A Company sells locks for $10 each. Manufacturing cost is $2.60 per lock; marketing costs are $2.40 per lock; and royalty payments are 20% of the selling price. The fixed cost of preparing the lock is $18 000. Capacity is 15,000 locks. Compute the contribution…
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please use P*R*T fomular as well. Thanks

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premium. Interest is payable quarterly. Record the appropriate journal entries if you knew that they made all the interest payments for 2015 and prepare the amortization schedule. [Hint: watch out for the payment dates].