Question 13 On 1/1/2020, Blue Company issued 5-year, 8% bonds with a par value of $400,000. The company received $320,000 in cash. Interest is paid semiannually on 30 June and 31 December every year Required: (1) Prepare the journal entry to record the bonds' issuance on 1/12020. (2) Prepare the journal entry to record the interest payment and the amortization of bond discount or premium on 30/6/2020. (3) Prepare the journal entry to record the repayment of bonds on 31/12/2024. CLEARLY INDICATE THE DEBITS & CREDITS 2020 XYZZ Company navs $10 000 cash to purchase Jand

Question 13 On 1/1/2020, Blue Company issued 5-year, 8% bonds with a par value of $400,000. The company received $320,000 in cash. Interest is paid semiannually on 30 June and 31 December every year Required: (1) Prepare the journal entry to record the bonds' issuance on 1/12020. (2) Prepare the journal entry to record the interest payment and the amortization of bond discount or premium on 30/6/2020. (3) Prepare the journal entry to record the repayment of bonds on 31/12/2024. CLEARLY INDICATE THE DEBITS & CREDITS 2020 XYZZ Company navs $10 000 cash to purchase Jand

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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Question 2. Recording and Reporting Bonds Robinson Inc., as a public company, issues $3 million of 10%, 10-year, corporate bonds on January 1, 2010. The bonds pay interest on every January 1 after the issuance. The company uses the effective-interest amortization method. Required: If market rate on issue date is 10%, prepare journal entries for the issuance and journal entries at the end of December 2010, 2011, and 2019. If market rate on issue date is 12%, prepare journal entries for the issuance and journal entries at the end of December 2010 and 2011. If market rate on issue date is 8%, prepare journal entries for the issuance and journal entries at the end of December 2010, 2011, and 2019.
Subject: acounting
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Bonds Payable On January 1, 2018, Thomas Company issued $100,000, 5-year, 12% bonds, with interest payable semi-annually, at an effective (market rate) of 10%. Use the present value factors from Exhibit 5 and 7 on pages 559 and 560, respectively from the textbook to calculate the price of the bonds at issuance. Prepare the journal entries to record the following: 1. 1/1/2018 issuance of the bonds for cash 2. 6/30/2018 semi-annual interest payment assuming straight line amortization 3. 12/31/2018 semi-annual interest payment assuming straight line amortization 4. 1/1/2019 redemption of the bonds at a price of 115. Please answer the following questions: 1. What was the total interest expense for the year 2018 reflected on the income statement? 2. What was the total amount borrowed? 3. Calculate the effective rate of interest for the year (Interest Expense/Total Amount Borrowed) and round to the nearest percent. Is this rate more indicative of the market rate or contract rate? Do you…
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