Subject: accounting Problem 14-3 (Algo) Straight-line and effective interest compared [LO14-2]On January 1, 2024, Reyes Recreational Products issued $100,000, 11%, four-year bonds. Interest is paid semiannually on June 30 andDecember 31. The bonds were issued at $96,895 to yield an annual return of 12%.Required:1. Prepare an amortization schedule that determines interest at the effective interest rate.2. Prepare an amortization schedule by the straight-line method.3. Prepare the journal entries to record interest expense on June 30, 2026, by each of the two approaches.5. Assuming the market rate is still 12%, what price would a second investor pay the first investor on June 30, 2026, for $12,000 of thebonds?Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EMA of $1. PVA of $1. EVAD of $1 and PVAD of $1)

A bond is a security of our debts we have to issue a bond when we are lending some money for a…

Answered: Problem 14-3 (Algo) Straight-line and…

Financial Accounting: The Impact on Decision Makers

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ISBN:9781305654174

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Chapter10: Long-term Liabilities

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Problem 10.3AP

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Cornerstone Exercise (Appendix 9A) Bond Issue Price On January 1, 2021, Callahan Auto issued $900,000 of 9%, 10-year bonds. Interest is payable semiannually on June 30 and December 31. Required: What is the issue price if the bonds are sold to yield 8%? (Note: Round to the nearest dollar.)
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Part A On January 1, 2022, East Pacific Enterprises issued 9%, 10-year bonds with a face amount of $1,350,000 for cash $1,265,880. Interest is payable semiannually on June 30 and December 31. The bonds were issued for an effective interest rate of 10%. Required: a. Prepare an amortization table for the first 3 payment periods using the effective interest method in the following format (rounded to the nearest two decimal place): (4 marks) Semi-annual (A) Interest Period-end (B) (C) (D) (E) Cash Bond Discount Interest Interest Amortization Discount Unamortized Carrying Amount Date Paid Expense b. Prepare the journal entry (without explanation) to record the issuance of the bonds on January 1, 2022. (3 marks) c. Prepare the journal entry (without explanation) to record the third interest payment on June 30, 2023. (3 marks) d. Describe four characteristics of the effective-interest method of accounting for bonds. (4 marks)
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.
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Problem 4: DONNER Company issued 3-year, 12% bonds with face amount of P4,000,000. Interest is payable semi- annually on April 1 and October 1. The bonds were issued on April 1, 2021 for P4,203,028 which represents an effective interest cost of 10% per year. ( Requirements: G. Prepare an amortization table using the effective interest method. H. Prepare journal entries for 2021. I. Compute or provide the answers for the following: 19. How much is the interest paid for the year ended, December 31, 2021? 20. How much is the interest expense for the year ended, December 31, 2021? 21. What is the carrying amount of the bonds on December 31, 2021?
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57 s On January 1, 2024, Lakeside Amusement Park issues $660,000 of 5% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. Assume that the market interest rate is 5% and the bonds issue at face amount. Required: 1a. Calculate the issue price of a bond. 1b. Complete the first three rows of an amortization schedule. (FV of $1, PV of $1. FVA of $1, and PVA of $1) Assume that the market interest rate is 6% and the bonds issue at a discount. 2a. Calculate the issue price of a bond. 2b. Complete the first three rows of an amortization schedule. (FV of $1. PV of $1. FVA of $1, and PVA of $1) Assume that the market interest rate is 4% and the bonds issue at a premium. 3a. Calculate the issue price of a bond. 3b. Complete the first three rows of an amortization schedule. (FV of $1, PV of $1, FVA of $1, and PVA of $1) Complete this question by entering your answers in the tabs below. Required 1A Date Required 1B Complete the first three rows of an…
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:
K On December 31, 2024, when the market interest rate is 12%, McCann Realty issues $900,000 of 13.25%, 10-year bonds payable. The bonds pay interest semiannually. McCann Realty received $964,699 in cash at issuance. Requirements 1. Prepare an amortization table using the effective interest amortization method for the first two semiannual interest periods. (Round to the nearest dollar.) 2. Using the amortization table prepared in Requirement 1, journalize issuance of the bonds and the first two interest payments. Requirement 1. Prepare an amortization table using the effective interest amortization method for the first two semiannual interest periods. (Round to the nearest dollar.) Carrying Premium Amortized Amount 12/31/2024 06/30/2025 12/31/2025 Requirement 2. Using the amortization table prepared in Requirement 1, journalize issuance of the bonds and the first two interest payments. (Record debits first, then credits. Select explanations on the last line of the journal entry. Round…
Problem 4: DONNER Company issued 3-year, 12% bonds with face amount of ₱4,000,000. Interest is payable semi- annually on April 1 and October 1. The bonds were issued on April 1, 2021 for ₱4,203,028 which represents an effective interest cost of 10% per year.( Requirements: Prepare an ammortization table using the effective interest method Prepare journal entries for 2021 Compute or provide the answers for the following: How much is the interest paid for the year ended, December31, 2021? How much is the interest expense for the year ended, December 31,2021? What is the carrying amount of the bonds on December31,2021?
Legacy issues $660,000 of 5.5%, four-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $648,412 when the market rate is 6%. Problem 14-4A Part 3 3. Prepare a straight-line amortization table for the bonds' first two years. Semiannual Period-End Unamortized Discount Carrying Value 01/01/2019 06/30/2019 12/31/2019 06/30/2020 12/31/2020

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