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 whichrepresents 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?

The bonds are issued at premium when market rate is higher than the face value of bonds.

Answered: Problem 4: DONNER Company issued…

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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On August 1, 2022, Bramble Corp. issued $482,400, 8%, 10-year bonds at face value. Interest is payable annually on August 1. Bramble’s year-end is December 31. 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 Aug. 1 enter an account title to record the issuance of the bonds on August 1 enter a debit amount enter a credit amount enter an account title to record the issuance of the bonds on August 1 enter a debit amount enter a credit amount eTextbook and Media List of Accounts Prepare the journal entry to record the accrual of interest on December 31, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 enter an…
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PB6. 13.3 Edward Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $480,000. Interest is payable semiannually. The discount is amortized using the straightline method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. Dec. 31, 2018: entry to record payment of interest to bondholders C. Dec. 31, 2018: entry to record amortization of discount
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3. On July 1, 2018, Volunteer Inc. issued bonds with a $500,000 face value at 108.0 and the 5-year bonds have a 10% interest rate in a market with a rate of 8%. Interest is payable semi-annually and the effective-interest method is used for amortization. Prepare journal entries for the following transactions. Premium on Bonds Payable Interest Income Discount on Bonds Payable Interest Expense Cash Bonds Payable PLEASE NOTE: For each of the following journal entries there is one account's treatment (DR or CR), that depends on whether it is a bond issued at a premium or a discount. You are to identify if it is a DR or a CR. You must enter the account names exactly as written above and all dollar amounts will be rounded to whole dollars with "$" and commas as needed (i.e. $12,345). July 1, 2018: to record issuing the bonds DR DR/CR ? CR Dec. 31, 2018: to record the amortization & payment of interest to bondholders: DR…
Determining the present value of bonds payable and journalizing using the effective-interest amortization method Brad Nelson, Inc. issued $600,000 of 7%, six-year bonds payable on January 1, 2018. The market interest rate at the date of issuance was 6%, and the bonds pay interest semiannually. Requirements How much cash did the company receive upon issuance of the bonds payable? (Round to the nearest dollar.) Prepare an amortization table for the bond using the effective-interest method, through the first two interest payments. (Round to the nearest dollar.) Journalize the issuance of the bonds on January 1, 2018, and the first and second payments of the semiannual interest amount and amortization of the bonds on June 30, 2018, and December 31, 2018. Explanations are not required.
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.
Complex Solution Company issues P2 M face value, 9%, 10-year bonds payable on December 31, 2023. Interest is paid semi-annually each June 30 and December 31. The bonds were sold at a price of 98. Complex uses the straight-line method of amortizing bond discounts and premium. **Compute for Amount of Bond Premium or Discount on December 31, 2023. **Bond Interest Expense for 2024 with respect to these bonds **Carrying Value of the bonds as of December 31, 2024.
Required information Skip to question [The following information applies to the questions displayed below.] Legacy issues $325,000 of 5%, four-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $292,181 when the market rate is 8%. 2. Determine the total bond interest expense to be recognized over the bonds' life. Total bond interest expense over life of bonds: Amount repaid: payments of Par value at maturity Total repaid Less amount borrowed Total bond interest expense

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