Problem 3 Bond Amortization (Discount) On January 1, 2022, Goldeneye Corp. issued a 5-year bond with a face value of P6,000,000 with a nominal rate of 10% for P5,567,426.86. This issuance has an effective rate of 12%. The interest is payable every December 31. The face value of the bond will be repaid at the end of 5 years. Using the effective interest method, complete the amortization table Date Interest Payments Interest Expense Amortization Carrying Value January 1, 2022 December 31, 2022 December 31, 2023 December 31, 2024 December 31, 2025 December 31, 2026

Problem 3 Bond Amortization (Discount) On January 1, 2022, Goldeneye Corp. issued a 5-year bond with a face value of P6,000,000 with a nominal rate of 10% for P5,567,426.86. This issuance has an effective rate of 12%. The interest is payable every December 31. The face value of the bond will be repaid at the end of 5 years. Using the effective interest method, complete the amortization table Date Interest Payments Interest Expense Amortization Carrying Value January 1, 2022 December 31, 2022 December 31, 2023 December 31, 2024 December 31, 2025 December 31, 2026

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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Q#9 On June 30, 2021, Singleton Computers issued 5% stated rate bonds with a face amount of $280 million. The bonds mature on June 30, 2036 (15 years). The market rate of interest for similar bond issues was 4% (2.0% semiannual rate). Interest is paid semiannually (2.5%) on June 30 and December 31, beginning on December 31, 2021. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)Required:1. Determine the price of the bonds on June 30, 2021.2. Calculate the interest expense Singleton reports in 2021 for these bonds using the effective interest method. 1. Table values are based on: n = i = Cash Flow Amount Present Value Interest Principal Price of bonds
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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.
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
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