Redwood Industries owns 8% bonds with a par value of $180,000 that pay interest on July 1 and January 1. The bonds were purchased on July 1. The amount of interest accrued on September 30 (the company's quarter-end) would be
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- Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market rate of 4%. The bonds paid interest semi-annually on June 30 and Dec. 31. How much money did the company receive when the bonds were issued? The bonds would be quoted at what rate?Starmount Inc. sold bonds with a $50,000 face value, 12% interest, and 10-year term at $48,000. What is the total amount of interest expense over the life of the bonds?On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?
- Irving Inc. sold bonds with a $50,000, 10% interest, and 10-year term at $52,000. What is the total amount of interest expense over the life of the bonds?Wilbury Corporation issued 1 million of 13.5% bonds for 985,071.68. The bonds are dated and issued October 1, 2019, are due September 30, 2020, and pay interest semiannually on March 31 and September 30. Assume an effective yield rate of 14%. Required: 1. Prepare a bond interest expense and discount amortization schedule using the straight-line method. 2. Prepare a bond interest expense and discount amortization schedule using the effective interest method. 3. Prepare adjusting entries for the end of the fiscal year December 31, 2019, using the: a. straight-line method of amortization b. effective interest method of amortization 4. If income before interest and income taxes of 30% in 2020 is 500,000, compute net income under each alternative. 5. Assume the company retired the bonds on June 30, 2020, at 98 plus accrued interest. Prepare the journal entries to record the bond retirement using the: a. straight line method of amortization b. effective interest method of amortization 6. Compute the companys times interest earned (pretax operating income divided by interest expense) for 2020 under each alternative.Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the market of interest was 9%. The company uses the effective-interest method of amortization. At the end of the year, the company will record ________. A. a credit to cash for $28,733 B. a debit to interest expense for $31,267 C. a debit to Discount on Bonds Payable for $1,267 D. a debit to Premium on Bonds Payable for $1.267
- Hambelton Ltd. issued $3,750,000 of 5% bonds payable on 1 September 20X9 to yield 4%. Interest on the bonds is paid semi-annually and is payable each 28 February and 31 August. The bonds were dated 1 March 20X8, and had an original term of five years. The accounting period ends on 31 December. The effective-interest method is used. (PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price at which the bonds were issued. (Round time value factor to 5 decimal places. Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.) Price of Bond $ 2. Prepare a bond amortization table for the life of the bond. (Round time value factor to 5 decimal places. Do not round Intermediate calculations. Round your final answers to the nearest whole dollar amount. Leave no cells blank - be certain to enter "O" wherever required.) Date Opening 1 2 3 4 5 6 7 3,918,281 Interest Payment Interest…On October 1, Qilan Ltd. purchased 7% bonds with a face value of $1,000 for trading purposes, accounting for the investment at FV - NI. The bonds were priced at 1.044 to yield Qilan 6% and pay interest annually each October 1. Qilan has a December 31 year end, and at this date, the bonds' fair value was $1,055. Assuming Qilan applies IFRS, prepare Qilan's journal entries for (a) the purchase of the investment, (b) the December 31 interest accrual, and (c) the year - end fair value adjustmen Assuming Qilan applies ASPE, uses the effective interest method, and reports interest income separately, prepare Qilan's journal entries for (d) the December 31 interest accrual, and (e) the year-end fair value adjustment. Round amounts to twoHambelton Ltd. issued $4,600,000 of 5% bonds payable on 1 September 20X9 to yield 4%. Interest on the bonds is paid semi-annually and is payable each 28 February and 31 August. The bonds were dated 1 March 20X8, and had an original term of five years. The accounting period ends on 31 December. The effective-interest method is used. (PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required:1. Determine the price at which the bonds were issued. (Round time value factor to 5 decimal places. Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.) 2. Prepare a bond amortization table for the life of the bond. (Round time value factor to 5 decimal places. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Leave no cells blank - be certain to enter "0" wherever required.) 3.Prepare journal entries to record the issuance of the bonds, payment of…
- On January 1, 2021, Carrow Company issued 11% bonds in the face amount of P1,000,000 that mature on December 31, 2030. The bonds were issued for P886,000 to yield 12%, resulting in bond discount of P114,000. The entity used the interest method of amortizing bond discount. Interest is payable on June 30 and December 31. For the year ended December 31, 2021, what amount should be reported as bond interest expense?Hambelton Ltd. issued $5,000,000 of 5% bonds payable on 1 September 20X9 to yield 4%. Interest on the bonds is paid semi-annually and is payable each 28 February and 31 August. The bonds were dated 1 March 20X8, and had an original term of five years. The accounting period ends on 31 December. The effective-interest method is used. (PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) 2. Prepare a bond amortization table for the life of the bond. (Round time value factor to 5 decimal places. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Leave no cells blank - be certain to enter "O" wherever required.) Premium Amortization Interest Interest Unamortized Net Bond Date Payment Expense Premium Liability Opening 1 2 4 7Webber Corp. issued $5,000,000 of 5% bonds on May 1 at par value. The bonds were dated January 1. The company pays interest on June 30 and December 31 each year. How much will the buyer need to pay the company in accrued interest at purchase and how much will the buyer receive in interest on June 30? Group of answer choices pay May 1 $125,000; receive June 30 $125,000 pay May 1, $0; receive June 30 $125,000 pay May 1 $125,000; receive June 30 $83,333 pay May 1 $83,333; receive June 30 $125,000
