Problem 10-2Declan Company issues a $120,000 on 12/31/X0, 10%, bond that matures in 3 years. Interest ispaid on December 31st of each year. Prepare all journal entries for all years related to this bondissue if it was priced to yield:8%10%12%Problem 10-3Still Declan Company - How about an 9% zero issued on 12/31/X0, due in 3years, face amount of $120,000. How much would you pay? Amortize it.

The objective of the question is to prepare journal entries for a bond issued by Declan Company and…

Answered: Problem 10-2 Declan Company issues a…

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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Part 3: Bonds On January 1, 2022 JK Exercise Gear issues $600,000 of 5% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. For each scenario, calculate the issue price of a bond, complete the first three rows of an amortization schedule and record the journal entries for the first three transactions. Scenario A: The market interest rate is 7%. 1. The bond is recorded at a 2. Calculate the issue price of the bond: 3. Complete the bond amortization schedule using your Bond Template in Excel. 4. Use your bond amortization schedule and record the journal entry for the issuance of the bond on January 1. Account Debit Account 5. Use your bond amortization schedule and record the journal entry for the first cash interest payment on June 30. Credit Debit Credit
x Premium Amortization On the first day of the fiscal year, a company issues a $8,500,000, 9%, 10-year bond that pays semiannual interest of $382,500 ($8,500,000 × 9% × ½), receiving cash of $9,077,589. Journalize the first interest payment and the amortization of the related bond premium. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Interest Expense fill in the blank fill in the blank Premium on Bonds Payable fill in the blank fill in the blank Cash
Question 4 1 Computing Bond Issue Price Abbington Inc. issues $140,000 of 9% bonds that pay interest semiannually and mature in 10 years. Compute the bond issue price assuming that the prevailing market rate of interest is: Note: Round your answer to the nearest whole dollar. a. 8% per year compounded semiannually. $0 b. 10% per year compounded semiannually. $0
! Required information Problem 9-7B Calculate the issue price of a bond and prepare amortization schedules (LO9-5, 9-7) [The following information applies to the questions displayed below.] Christmas Anytime issues $830,000 of 6% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. Calculate the issue price of a bond and complete the first three rows of an amortization schedule when: Problem 9-7B Part 2 2. The market interest rate is 7% and the bonds issue at a discount. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Do not round interest rate factors. Round your answers to nearest whole dollar.) Issue price Date $ Cash Paid 830,000 Interest Change in Expense Carrying Value 01/01/2021 06/30/2021 $ 29,050 $ 29,050 12/31/2021 29,050 Carrying Value
PROBLEM 1 On December 31, 2018, Edmand Inc. issued $750,000of 11% five-year bonds for $722,400, yielding an effective interest rate of 12%. Semi annual interest is payable on June 30 and December 31 each year. The firm uses effective interest method to amortize the discount. a) Prepare Amortization schedule showing the necessary information for the first two interest periods. Round amounts to the nearest dollar. b) Prepare the journal entry for the bond issuance on December 31, 2018. c) Prepare the journal entry to record bond interest expense and discount amortization at June 30 2019. d) Prepare the journal entry to record the bond interest expense and discount amortization at December 31, 2019
Santa Corporation issued a bond on January 1 of this year with a face value of $1,000. The bond's coupon rate is 7 percent and interest is paid once a year on December 31. The bond matures in three years. The annual market rate of interest was 9 percent at the time the bond was sold. The following amortization schedule pertains to the bond issued: January 1, Year 1 December 31, Year 1 December 31, Year 2 December 31, Year 3 Required: Required 1 to 3 Cash Paid Required 4 $70 70 70 Interest Expense Amortization $15 17 19 1. What was the bond's issue price? 2. Did the bond sell at a discount or a premium? How much was the premium or discount? 3. What amount(s) should be shown on the balance sheet for bonds payable at the end of Year 1 and Year 2? 4. Show how the following amounts were computed for Year 2: (a) $70, (b) $87, (c) $17, and (d) $981. Complete this question by entering your answers in the tabs below. 3. Bonds payable year 1 3. Bonds payable year 2 $85 87 89 Balance $949 964 981…
profile-image Sunny issued a convertible bond on January 1, 20X8, for $1,000,000, which is the face value of the bonds. The bonds are convertible into 20,000 common shares and pay interest annually on December 31 at a rate of 29%. Similar bonds without a conversion feature are priced to yield 6%. The bonds mature in seven year What is the interest expense recognized for 20X9 related to this bon a $48,1 b. $40,0 c. $46,0 d $60,0 00980098d?s d $60,000
Subject: accounting
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vj subject-Accounting
Problem #4 On February 1, 2021 Leslie's Linguine Ltd. purchased 630, 10-yr, $1,000 bonds for an amount which would generate a 5.0% annual rate of return. The bonds pay interest at an annual rate of 5.2% and the investment was purchased at a price Interest payments are made semi-annually on Feb. 1st and Aug. 1st. The investment is classified as Held to Maturity Securities. 1-Feb-21 Bond purchase 1-Aug-21 First semi-annual interest payment is received and amortization of discount or premium is recorded using the effective interest method. 31-Dec-21 The bonds are trading at $1,014 as of December 31, 2021 which is the company's year end. Interest is accrued. 1-Feb-22 Second semi-annual interest payment is received and amortization of discount or premium is recorded using the effective interest method. Instructions: Draft the appropriatejournal entries for the dates listed above.
Exercise 10-3 (Algo) Recording bond issuance and interest LO P1 On January 1, Boston Enterprises Issues bonds that have a $1,600,000 par value, mature in 20 years, and pay 8% Interest semiannually on June 30 and December 31. The bonds are sold at par. 1. How much Interest will Boston pay (in cash) to the bondholders every six months? 2. Prepare Journal entries to record (a) the issuance of bonds on January 1, (b) the first interest payment on June 30, and (c) the second Interest payment on December 31. 3. Prepare the journal entry for Issuance assuming the bonds are issued at (a) 98 and (b) 102. Complete this question by entering your answers in the tabs below. Required 1 Required 2 How much interest will Boston pay (in cash) to the bondholders every six months? Semiannual Cash Interest Payment Par (maturity) Value Required 3 X Semiannual Rate Required 1 Required 2 >

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