Problem 1. A company "I aim to get at least 90 out of 100 for this exam" (further in a text as Company) issued $45 million of 30-year, 7 percent bonds on April 1, 2015, at 105. Interest is due on May 31 and November 30 each year, Company's fiscal year ends on December 31. Prepare the following journal entries: a. All journals required to be recorded in 2015 related to this bond. May 31, 2016, to pay interest and to amortize the bond premium. b. c. April 1, 2045, to pay interest, amortize the bond premium, and retire the bonds at maturity.

Problem 1. A company "I aim to get at least 90 out of 100 for this exam" (further in a text as Company) issued $45 million of 30-year, 7 percent bonds on April 1, 2015, at 105. Interest is due on May 31 and November 30 each year, Company's fiscal year ends on December 31. Prepare the following journal entries: a. All journals required to be recorded in 2015 related to this bond. May 31, 2016, to pay interest and to amortize the bond premium. b. c. April 1, 2045, to pay interest, amortize the bond premium, and retire the bonds at maturity.

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

The following section is taken from Bramble Corp.’s balance sheet at December 31, 2021. Current Liabilities Interest Payable $ 89,500 Long-term Liabilities Bonds payable, 5%, due January 1, 2024 1,790,000 Bond interest is payable annually on January 1. The bonds are callable on any interest date. a) Journalize the payment of the bond interest on January 1, 2022. b) Assume that on January 1, 2022, after paying interest, Bramble calls bonds having a face value of $602,000. The call price is 105. Record the redemption of the bonds. c) Prepare the entry to record the accrual of interest on December 31, 2022.
A Company issued $480,000 of 7% bonds on January 1. Interest is payable semiannually on July 1 and January 1. The bonds are issued at face value.. The journal entry on June 30 should include : Show your work A debit to Interest Payable for $480,000 x .07. A credit to Interest Payable for $480,000 x .07. A debit to Interest Payable for $480,000 x .07 х 6/12. A credit to Interest Payable for $480,000 x .07 х 6/12.
Knowledge Check 01 On January 1, Duffy Enterprises issued $100,000 in bonds that mature in 10 years. The bonds were issued at face value. The bonds have a stated interest rate of 8% and pay interest once per year on December 31. Prepare the appropriate journal entry to record the issuance of the bonds. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) - View transaction list View journal entry worksheet No 1 Transaction A Gain on Bond Retirement Interest Expense General Journal Debit 104,000 Credit 8,000 Ⓒ
Issuing Bonds at Face Amount The first day of the fiscal year, a company issues a $700,000, 6%, 10-year bond that pays semiannual interest of $21,000 ($700,000 x 6% x 2 year), receiving cash of $700,000. 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. 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.
Auditing and Assurance On April 1, 2020 X Company issued serial bonds with a face amount of P5,000,000 for P4,700,000. The bonds pay interest of 12% every April 1 and October 1. The bonds mature on April 1 of each year at the rate of P1,000,000.Required: Prepare journal entries for 2020 and 2021.
Journalize the entries to record the following selected bond investment transactions for Dip, Inc. You MUST use the accounts outlined in the Chapter 15 narrated PowerPoint presentations – the accounts in your textbook aren’t descriptive enough. Journal entry descriptions are not required. *(Must include all supporting calculations) Date Transaction Description 4/1/2022 Purchased for cash, $50,000 of Bump, Inc. 9% bonds at 100 plus accrued interest. The bonds pay interest on January 31st and July 31st. 7/31/2022 Received the semiannual interest payment. 10/31/2022 Sold $20,000 of bonds at 104 plus accrued interest. 12/31/2022 Accrued interest. 12/31/2022 Marked the debt investments to a market value of $34,000. The debt investments are classified as available for sale investments. 12/31/2023 Market the debt investments to a market value of $31,000. The debt investments are classified as available for sale investments.
Question 2. Recording and Reporting Bonds Robinson Inc., as a public company, issues $3 million of 10%, 10-year, corporate bonds on January 1, 2010. The bonds pay interest on every January 1 after the issuance. The company uses the effective-interest amortization method. Required: If market rate on issue date is 10%, prepare journal entries for the issuance and journal entries at the end of December 2010, 2011, and 2019. If market rate on issue date is 12%, prepare journal entries for the issuance and journal entries at the end of December 2010 and 2011. If market rate on issue date is 8%, prepare journal entries for the issuance and journal entries at the end of December 2010, 2011, and 2019.
On January 1, 2022, Ivanhoe Company issued $425,000, 12%, 10-year bonds at face value. Interest is payable annually on January 1. (a) Your answer is partially correct. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically Indented when amount is entered. Do not Indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1, Cash 51000 2022 Bonds Payable 51000
Pretzelmania, Incorporated, issues 7%, 10-year bonds with a face amount of $61,000 for $61,000 on January 1, 2024. Interest is paid semiannually on June 30 and December 31. Required: 1. & 2. Record the bond issue on January 1, 2024 and first interest payment on June 30, 2024. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
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% x 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 On the first day of the fiscal year, a company issues an $698,000, 6%, 5-year bond that pays semiannual interest of $20,940 (5698,000 6% 1/2), receiving cash of $656,120 Required: Journalize the entry to record the first interest payment and the amortization of the related bond discount using the straight-line method. Refer to the Chart of Accounts for exact wording of account titles
Issuing Bonds at Face Amount The first day of the fiscal year, a company issues a $350,000, 6%, 10-year bond that pays semiannual interest of $10,500 ($350,000 x 6% x 2 year), receiving cash of $350,000. 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. 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 reguire an entry, leave it blank. 00 00
25. Bonds Issued at a Discount (Effective Interest) Crafty Corporation issued $475,000 of 5%, seven-year bonds on December 31, 2022, for $448,484. Interest is paid annually on December 31. The market rate of interest is 6%. Required: Prepare the journal entries for December 31, 2023 and 2024. For those boxes in which no entry is required, leave the box blank. If required, round your answers to the nearest whole dollar.