Prepare the journal entries to record (a) the issuance of the bonds, (b) the payment of interest and related amortization on July 1, 2020, and (c) the accrual of interest and the related amortization on December 31, 2020
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Foreman Company issued $800,000 of 10%, 20-year bonds on January 1, 2020, at 84.95 to yield 12%. Interest is payable semiannually on July 1 and January 1.
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- Blue Corporation issued a 10 year bonds on January 1, 2019. Costs associated with the bond issuance were P1, 600,000. Blue Corporation uses the straight line method to amortize bond issue costs. Prepare the December 31, 2019 entry to record the 2019 bond issue cost amortization.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: a. Prepare the necessary journal entry on July 1, 2018. b. Assume that the accounting date for ABC Co. is December 31, prepare the necessary journal entry on December 31, 2018. 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. TONREOn January 1, 2020, Ehrlich Corporation issued 7%, 10-year bonds with a face amount of $800,000 at 97. Interest is payable annually on January 1. Instructions Prepare the following entries: record the issuance of the bonds on 1/1/20 first annual interest accrual on 12/31/20 amortization, assuming that the company uses straight-line amortization on 12/31/20 payment of interest on 1/1/21 What is the unamortized balance of the discount account at 1/1/21? What is the carrying value of the bond at 1/1/21?.
- 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, Stellar Corporation issued $450,000 of 7% bonds, due in 10 years. The bonds were issued for $423,783, and pay interest each July 1 and January 1. Stellar uses the effective-interest method. 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. Assume an effective-interest rate of 8%. (Round answers to O decimal places, e.g. 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.)On January 1, 2020, Novak Corporation issued $510,000 of 7% bonds, due in 8 years. The bonds were issued for $480,288, and pay interest each July 1 and January 1. Novak uses the effective-interest method. 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. Assume an effective-interest rate of 8%. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 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 amount is entered. Do not indent manually.) Account Titles and Explanation Cash Discount on Bonds Payable Bonds Payable Interest Expense Discount on Bonds Payable Cash Interest Expense Discount on Bonds Payable Interest Payable Debit Credit
- On January 1, 2019, Rodgers Company purchased $200,000 face value, 10%, 3-year bonds for $190,165.35, a price that yields a 12% effective annual interest rate. The bonds pay interest semiannually on June 30 and December 31. Required: 1. Record the purchase of the bonds. 2. Prepare an investment interest income and discount amortization schedule using the effective interest method. 3. Record the receipts of interest on June 30, 2019, and June 30, 2021.On August 1, 2027, Concord Corporation issued $500,400, 9%, 10-year bonds at face value. Interest is payable annually on August 1. Concord's year-end is December 31. Prepare a tabular summary to record the following events. (a) The issuance of the bonds. (b) (c) The accrual of interest on December 31, 2027. The payment of interest on August 1, 2028. Include margin explanations for the changes in revenues and expenses. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.) (a) Aug. 1, 2027 $ (b) Dec. 31, 2027 (c) Aug. 1, 2028 Assets Cash $ Bonds Payable Liabilities + $ Interest Payable + $ Paid in Capital Common Stock $ Revenue Stockholders' Equity $ Expense Retained Earnings $ Dividend Bonds payable Discount on bonds Interest expense Premium on bondsOn January 1, 2020, Martinez Corporation issued $570,000 of 9% bonds, due in 8 years. The bonds were issued for $603,210, and pay interest each July 1 and January 1. The effective-interest rate is 8%.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. Martinez uses the effective-interest method. ( No. Date Account Titles and Explanation Debit Credit (a) Jan. 1, 2020July 1, 2020Dec. 31, 2020 (b) Jan. 1, 2020July 1, 2020Dec. 31, 2020 (c) Jan. 1, 2020July 1, 2020Dec. 31, 2020
- Hillside issues $1,000,000 of 6%, 15-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $864,113. Required:4. Prepare the first two years of a straight-line amortization table.5. Prepare the journal entries to record the first two interest payments.The Vaughn Company issued $330,000 of 7% bonds on January 1, 2020. The bonds are due January 1, 2025, with interest payable each July 1 and January 1. The bonds were issued at 101.Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Vaughn Company records straight-line amortization semiannuallyThe board of directors of Canterbury Plus authorizes the issue of $9,000,000 of 9%, 5-year bonds payable. The semiannual interest dates are May 31 and November 30. The bonds are issued on May 31, 2019, at face value. Requirements 1. Journalize the following transactions: a. Issuance of half of the bonds on May 31, 2019 b. Payment of interest on November 30, 2019 c. Accrual of interest on December 31, 2019 d. Payment of interest on May 31, 2020 2. Report interest payable and bonds payable as they would appear on the Canterbury Plus balance sheet at December 31, 2019. Requirement 1. Journalize the transactions a through d. (Record debits first, then credits. Exclude explanations from journal entries.) a. Issuance of half of the bonds on May 31, 2019 Journal Entry Date 2019 May Date 2019 Nov. 31 b. Payment of interest on November 30, 2019 Accounts 30 Journal Entry Accounts Debit Debit Credit Credit