Problem 2 Bond Amortization (Premium) On January 1, 2022, Skyfall Inc. received permission to issue a 5-year bond with a face value of P6,000,000 The nominal rate is 12% and is payable annually every December 31. The face value of the bond will be repaic in full after 5 years. On January 1, 2022, Skyfall Inc. sold the bonds for P6,454,894.41with an effective yield of 10%. Using the effective interest method, complete the amortization table. Interest Payments Interest Expense Carrying Value Date January 1, 2022 December 31, 2022 December 31, 2023 Amortization

Problem 2 Bond Amortization (Premium) On January 1, 2022, Skyfall Inc. received permission to issue a 5-year bond with a face value of P6,000,000 The nominal rate is 12% and is payable annually every December 31. The face value of the bond will be repaic in full after 5 years. On January 1, 2022, Skyfall Inc. sold the bonds for P6,454,894.41with an effective yield of 10%. Using the effective interest method, complete the amortization table. Interest Payments Interest Expense Carrying Value Date January 1, 2022 December 31, 2022 December 31, 2023 Amortization

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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Problem 1: On January 1, 2022, Smith Corp. issued 5-year 12% bonds with face amount of P5,000,000 at a price of P4,497,320 which yields an effective rate of 15%. Interest is payable annually every December 31 starting December 31, 2022. Case 3: The bonds are retired at 92 plus accrued interest on September 30, 2024. 6. How much is the total amount of cash paid to retire the bonds on September 30, 2024? 7. How much is the gain or loss on early retirement of bonds on September 30, 2024? 8. How much is the interest expense for the year 2024?
q6 Sun Corp. markets a 10-year bond issue dated January 1, 2018. The bonds pay interest semiannually on January 1 and July 1. If these bonds are sold on August 1, 2018, how many months accrued interest must be paid by the purchaser and over how many months would any discount on the bonds be amortized?A. Accrued interest- 7 month; Amortization period- 120 monthsB. Accrued interest- 7 month; Amortization period- 113 monthsC. Accrued interest- 1 month; Amortization period- 120 monthsD. Accrued interest- 1 month; Amortization period- 113 months
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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
sh2 Universal Foods issued 8% bonds, dated January 1, with a face amount of $160 million on January 1, 2024. The bonds mature on December 31, 2038 (15 years). The market rate of interest for similar issues was 10%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. Required: 1. Determine the price of the bonds at January 1, 2024. 2. to 4. Prepare the journal entries to record their issuance by Universal Foods on January 1, 2024, interest on June 30, 2024 and interest on December 31, 2031.
QUESTION Part A) On January 1, 2023 its issue date, Diogenes Inc. purchased a 9%, $200,000, 10-year bond. Interest is paid annually on December 31. Diogenes uses the amortized cost model and the effective interest method for amortizing premium or discount. The current market rate was 10% and as a result Diogenes paid $187,711 for the bonds. On December 31, 2023, the bonds have a market value of $185,000. Diogenes applies IFRS. Instructions Record the receipt of interest for 2023. Part B) Zeus Corporation is considering making a significant long-term investment in Ares Ltd., a young and very promising company. Zeus decides to make a smaller investment first, and if Ares turns out to be successful, Zeus intends to make an additional investment to reach significant influence. Ares has 110,000 shares outstanding. On January 1, 2023, Ares issues Zeus 10,000 shares for $400,000 in cash (so now there are 120,000 shares outstanding). Additional information: 1. On November 1, 2023, Ares…
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
22.1 ABC Company issues P5,000,000, 6%, 5-year bonds dated January 1, 2025, on January 1, 2025. The bonds pay interest semiannually on June 30 and December 31. The bonds are issued to yield 5%. ABC uses an effective interest method of amortization and 4-decimal PVF. The initial amount of the bond liability is (Round off your answer to the nearest peso.)
View Policies On January 2, 2015, Monty Corporation issued $ 1,950,000 of 10% bonds at 98 due December 31, 2024. Interest on the bonds is payable annually each December 31. The discount on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable "interest method.") Current Attempt in Progress The bonds are callable at 101 (i.e., at 101% of face amount), and on January 2, 2020, Monty called $ 1,170,000 face amount of the bonds and redeemed them. Ignoring income taxes, compute the amount of loss, if any, to be recognized by Monty as a result of retiring the $ 1,170,000 of bonds in 2020. (Round answer to O decimal places, eg. 38,548.) Loss on redemption Prepare the journal entry to record the redemption. (Round answers to O decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented…
Sh21
j. Bonds Payable - Series 1 On January 1, 2015, Hazer issued $400,000 12% 10-year bonds. Interest is paid annually. The bonds were issued for investors to have a yield of 10%. Because of the high interest rate, Hazer decided to call the bonds on December 31, 2020 at 110. No entries were made in 2020 regarding this bond. The bondholders are entitled to receive the 2020 interest payment (prior to call). In the Excel spreadsheet, see the tab labelled "Bonds Payable - Series 1" to determine the carrying value, create the amortization schedule and perform any additional calculations. NOTE - the amount on the trial balance (Bonds Payable - Series 1) is your check number for the amortization schedule at December 31, 2020 - BEFORE ADJUSTMENTS and recording the 2020 interest payment. Present Value Calculation & Amortization Schedule PV Rate Nper Pymt FV Type