Randolph Company issued $1,000,000 of 6.5%, 8-year bonds dated June 1, 20X3, with semiannual interest payments on June 1 and December 1. The bonds were issued on June 1, 20X3, at 103 3/8. a. Were the bonds issued at a premium, a discount, or at face value? b. Was the market rate of interest higher, lower, or the same as the coupon rate of interest? c. How much cash was received by Randolph Company upon issuance of the bonds
Q: Atom Endeavour Co. Issued $27 million face amount of 5.6% bonds when market Interest rates were…
A: If the coupon rate is lower than the market interest rate, then the bonds are issued at a discount.…
Q: BZ Corp issues 5.0%, 10-year bonds with a total face amount of $1,000,000. The market interest rate…
A: The bond valuation refers to determining the bond's current price, Yield To Maturity, Current yield,…
Q: On January 1, Elias Corporation issued 7% bonds with a face value of $94,000. The bonds are sold for…
A: Bonds will pay fixed amount of interest on face value of the bond on monthly/ quarterly/ half…
Q: On January of the current year, Banek Inc issued $350,000 of 8% nine year bonds for $309,086, which…
A: Bonds payable is one of the liability being incurred in business. It can be short term bonds or long…
Q: On January 1, Remington Corp issued $500,000 of 15-year, 10% bonds payable, yielding an effective…
A:
Q: On January 1, Parson Freight Company issues 7.0%, 10-year bonds with a par value of $3,500,000. The…
A: Bonds are a form of loan or debt that is being issued by the company, on which regular interest…
Q: On January 1, Year 1, Parker Company issued bonds with a face value of $70,000, a stated rate of…
A: “Since you have posted a question with multiple sub parts, we will provide the solution only to the…
Q: McNeil Corporation issued $660,000 of 7% 10-year bonds. The bonds are dated and sold on January…
A: While using Effective Interest Method we recognize interest expenses on the basis of effective…
Q: On January 1, Elias Corporation issued 10% bonds with a face value of $71,000. The bonds are sold…
A: Bonds refer to the debt instrument which is issued in order to raise funds (capital) for the…
Q: On January 1, Year 1, Parker Company issued bonds with a face value of $65,000, a stated rate of…
A: Bond is a financial instrument which is issued by the large organization to raise the funds. Bonds…
Q: On January 1, 20x1, Fleetwood Inc. issued bonds with a face amount of $25 million and a stated…
A: When amortizing bonds, the Effective Interest Method shows the real interest rate that was in effect…
Q: A. On January 1, 2021, Bradley Company issued $100,000, 9%, 4-year bonds. Interest is paid…
A:
Q: Enviro Company issues 8%, 10-year bonds with a par value of $250,000 and semiannual interest…
A: Given: Company’s issues = 8% Life of bond = 10 years Par value = $ 250,000 Annual market rate = 5 %…
Q: January 1 of the current year, Barton Corporation issued 7% bonds with a face value of $79,000. The…
A: Amortization is used to reflect a more accurate picture of financial performance and position over…
Q: Enviro Company issues 8.50%, 10-year bonds with a par value of $260,000 and semiannual interest…
A: Bond :— It is one of the type of securities that pays fixed periodic interest and face value at the…
Q: Beluga Inc. issued 10-year bonds with a face value of $130,000 and a stated rate of 3% when the…
A: Bonds are considered a financial instrument used to raise finance for the organization. It is also…
Q: Jones Co. issued a $1,000 face amount 10-year bond and received $1,000 at the time of issuance.…
A: The bonds are the financial instruments that are issued to raise money from the market or investors.…
Q: n 1/1/20, $300,000 of 10 year, 8% bonds were issued for $262,616. The issue price was based on an…
A: Straight line amortization method: Under the straight line method of amortization the bond discount…
Q: A company issued 11%, 5-year bonds with a par value of $105.000. The market rate when the bonds were…
A: Here in this question we are require to calculate the interest amount that needs to record. When…
Q: On January 1, Parson Freight Company issues 9.0 %, 10-year bonds with a par value of $3,900,000. The…
A: Bonds payable are one of the sources of finance and are shown as liability. If the interest rate is…
Q: Best Beans Coffee Company issued bonds with a $270,000 face value on January 1, Year 1. The bonds…
A: The bonds are financial instruments that are issued to raise money from the investors. The bonds are…
Q: On January 1, Year 1, the Diamond Association issued bonds with a face value of $210,000, a stated…
A: The amount of discount on the issue date is determined by deducting the selling value from the face…
Q: Diaz Company issued bonds with a face value of $180,000 on January 1, Year 1. The bonds had a stated…
A: Bond is a financial instrument used to raise funds by large organizations. The issue price of bond…
Q: On Jan. 1, Year 1, Foxcroft Inc. issued 100 bonds with a face value of $1,000 each for $104,000. The…
A: Journal entries are passed following the golden rules of accounting Debit all assets and expenses…
Q: On January 1, Lincoln Corp. issued $3,000,000, 11% bonds for $3,195,000. The market rate of interest…
A: Carrying amount of bonds = Issue price of the bonds - Premium amortized Cash interest paid= Face…
Q: What is the entry to record the first semiannual interest payment, and the amortization of the bond…
A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…
Q: Keaubie Co. issued $400,000, 6.75% 15-year bonds payable at a price of 100 (face value), on Jan.…
A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…
Q: Diaz Company issued bonds with a face value of $127,000 on January 1, Year 1. The bonds had a stated…
A: As you have asked multiple sub-parts we can solve only first three sub-parts for you please repost…
Q: The notes to the Thorson Ltd. financial statements reported the following data on December 31, Year…
A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…
Q: On January 1, Year 1, Kenneth Cole Inc. issued $2,000,000, 5%, 10-year bonds, with interest payable…
A: Bonds can be referred to as financial securities which are issued by large organizations to raise…
Q: On January 1, Parson Freight Company issues 8.5%, 10-year bonds with a par value of $4,300,000. The…
A: Bonds payable is one of the liability being incurred in business. There can be long term bonds or…
Q: A company issued 8%, 15-year bonds with a par value of $470,000 that pay Interest semiannually. The…
A: Bonds: In finance, bonds are a sort of safety net utilized in shared assets and private…
Q: Beluga Inc. issued 10-year bonds with a face value of $150,000 and a stated rate of 3% when the…
A: Bonds are issued by the company to raise an amount of money for financing projects of the company…
Q: On January 1, Elias Corporation issued 9% bonds with a face value of $75,000. The bonds are sold for…
A: Bonds means the instrument where the bond holder gives money to bond issuer and in return bond…
Q: A company issued 9.2%, 10-year bonds with a par value of $100,000. Interest is paid semiannually.…
A: In this question we require to calculate the amount of cash that should be paid as a interest to…
Q: iaz Company issued bonds with a face value of $180,000 on January 1, Year 1. The bonds had a stated…
A: Bonds payable are debt instruments issued to raise money. When the contract rate is more than the…
Q: Beluga Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 3% when the…
A: Bonds are fixed-income securities issued by a corporate organization to borrow funds from other…
Q: Milan Company issued bonds with a face value of $463,000 on January 1, Year 1. The bonds had a 6…
A: A bond is a debt investment where an investor loans money to an entity (typically a corporation or…
Q: Analyzing and Reporting Financial Statement Effects of Bond Transactions On January 1 of the current…
A: The bond is considered a debt instrument that is issued to raise funds. It is generally issued by…
Q: On January 1, Marigold Corp. issued $270,000, 7%, 10-year bonds at face value. Interest is payable…
A: Accrual of interest on December 31 = Face value of bonds x rate of interest x period = $270000*7%*1…
Q: Reynolds Co issued $87 million face amount of 11.00% bonds when market interest rates were 10 90%…
A: Solution: Bonds are issued by a company to borrow funds for the business. It is having a par value,…
Q: Enviro Company issues 11.00%, 10-year bonds with a par value of $310,000 and semiannual interest…
A: The bonds are issued at premium when market rate is lower than the coupon rate of bonds payable.…
Q: On January 1, 20X5, Seymond Corporation issued $100,000 in 10-year, zero-coupon bonds. The interest…
A: Zero coupon bonds means those bonds which were issued for money or any assets but for which no…
Step by step
Solved in 3 steps
- Jacobs Company issued bonds with a $168,000 face value on January 1, Year 1. The bonds were issued at 105 and carried a 5-year term to maturity. They had a 9% stated rate of interest that was payable in cash on December 31st of each year. Jacobs uses the straight-line method to amortize bond discounts and premiums. Based on this information alone, how does the recognition of interest expense during Year 1 affect the company's accounting equation? Multiple Choice Decreases both assets and stockholders' equity by $13,440 Decreases stockholders' equity by $13,440, decreases liabilities $1,680, and decreases assets by $15,120 Increases liabilities by $1,680, decreases assets by $13,440, and decreases stockholders' equity by $15,120 Decreases both assets and stockholders' equity by $15,120On June 30, Jamison Company issued $2,500,000 of 10-year, 9% bonds, dated June 30, for $2,580,000. Present entries to record the following transactions. Issuance of bonds. (a) Payment of first semiannual interest on December 31 (record separate entry from premium (b) amortization). (C) Amortization by straight-line method of bond premium on December 31.1. On January 1, a company issues bonds dated January 1 with a par value of $300,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $312,177. The journal entry to record the issuance of the bond is: Debit Cash $312,177; credit Discount on Bonds Payable $12,177; credit Bonds Payable $300,000. Debit Cash $300,000; debit Premium on Bonds Payable $12,177; credit Bonds Payable $312,177. Debit Bonds Payable $300,000; debit Interest Expense $12,177; credit Cash $312,177. Debit Cash $312,177; credit Premium on Bonds Payable $12,177; credit Bonds Payable $300,000. Debit Cash $312,177; credit Bonds Payable $312,177.
- . On 1/1/21, Ehrlich Co. issued 4 year bonds with a face value of $700,000. The stated (bond) rate is 8%, payable semiannually on 1/1 and 7/1. The market rate at the time of issuance was 10%. a. Calculate the issue price of the bonds. b. Prepare the journal entry for the issuance of the bonds. c. Complete the amortization table below. Date cash paid interest expense amortization carrying value 1/1/21 7/1/21 1/1/22 7/1/22 d. Prepare the journal entries for the 7/1/21 interest payment and amortization, 12/31/21 interest accrual and amortization, and 1/1/22 interest payment. e. Prepare the journal entry for retirement of the bonds at maturity f. Assume instead that the bonds were redeemed on 7/1/22 at 102. Prepare the journal entry.Enviro Company issues 12.00%, 10-year bonds with a par value of $460,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 9.00%, which implies a selling price of 128.625. The straight-line method is used to allocate interest expense. What are the issuer's cash proceeds from issuance of these bonds? What total amount of bond interest expense will be recognized over the life of these bonds? What is the amount of bond interest expense recorded on the first interest payment date?I. Metro Company purchased $500,000, 10%, 5-year bonds on January 1, 20x1, with interest payable on July 1 and January 1. The market interest rate (yield) was 8% for bonds of similar risk and maturity. The market value on December 31, 20x1 was $555,000 and all bonds were sold for $507,500 on January 1, 20x2 after the second payment. Required: compute the bond price on January 1, 20x1, prepare the amortization schedule and record journal entries on January 1, 20x1, July 1, 20x1, December 31, 20x1 and January 1, 20x2 assuming the bond investment is classified as available-for-sale security.
- 7. Bower Company sold $100,000 of 20-year bonds for $95,000. The stated rate on the bonds was 7%, and interest is paid annually on December 31. What entry would be made on December 31 when the interest is paid? (Numbers are omitted.) a.Dr. Interest ExpenseCr. Bonds PayableCr. Cash b.Dr. Interest ExpenseCr. Cash c.Dr. Interest ExpenseCr. Discount on Bonds PayableCr. Cash d.Dr. Interest ExpenseDr. Discount on Bonds PayableCr. CashOn January 1 of the current year, the Queen Corporation issued 12% bonds with a face value of $83,000. The bonds are sold for $80,510. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, five years from now. Queen records straight-line amortization of the bond discount. Determine the bond interest expense for the year ended December 31. Select the correct answer. a-$830 b-$10,458 c-$2,490 d-$9,960Diaz Company issued bonds with a $149,000 face value on January 1, Year 1. The bonds had a 6 percent stated rate of interest and a 10-year term. Interest is paid in cash annually, beginning December 31, Year 1. The bonds were issued at 97. The straight-line method is used for amortization. Required a. Use a financial statements model like the one shown next to demonstrate how (1) the January 1, Year 1, bond issue and (2) the December 31, Year 1, recognition of interest expense, including the amortization of the discount and the cash payment, affect the company's financial statements. Note: Use + for increase or for decrease. In the Statement of Cash Flows column, use the initials OA to designate operating activity, IA for investing activity, and FA for financing activity. Not all cells require input. Effect of Transactions on Financial Statements Event Number Assets Balance Sheet Liabilities Income Statement Stockholders' Equity Revenue Expense Net Income Statement of Cash Flows 1. 2.…
- On January 1, Elias Corporation issued 10% bonds with a face value of $68,000. The bonds are sold for $65,960. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, 10 years from now. Elias records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31 of the first year is a. $567 b. $2,040 c. $7,004 d. $6,800Blend Inc. issued 500, $1,000 bonds at 102. Each bond was issued with two detachable stock warrants. After issuance, the bonds were selling in the market at 97. a. Assume the warrants had a market value of $35 each after issuance. Under the proportional method, the journal entry to record the issuance of the bonds and warrants includes a debit to Discount on Bonds Payable of? b. Assume that after issuance, the market price of the warrants, without the bonds, cannot be determined. Under the incremental method, the journal entry to record the issuance of the bonds and warrants includes a debit to Discount on Bonds Payable of? Please avoid solutions image based thenxMarigold Hills Ltd. issued five-year bonds with a face value of $160,000 on January 1. The bonds have a coupon interest rate of 7% and interest is paid semi-annually on June 30 and December 31. The market interest rate was 5% when the bonds were issued at a price of 109. Using above information, determine the proceeds received by the company when the bonds were issued. Proceeds from issue of the bonds eTextbook and Media $ Determine the interest expense recorded for the six months ending June 30 when the first interest payment is made. Interest expense $ eTextbook and Media Determine the balance in the Bonds Payable account immediately following the first interest payment. Balance in bonds payable account eTextbook and Media