Required InformationP10-10 (Algo) Preparing a Bond Amortization Schedule for a Bond Issued at a Premium LO10-5[The following information applies to the questions displayed below.]On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bondsmature at the end of four years. Olive uses the effective-interest amortization method. The partially completedamortization schedule below pertains to the bonds:Interest$ 1,661??1,640DateJanuary 1, Year 1End of Year 1End of Year 2End of Year 3End of Year 4-10-10 Part 3Cash$ 1,792??Cash received?Amortization$ 131?145?Balance32,56632,43532,297?32,000$. How much cash was received on the day the bonds were issued (sold)?

The bonds are reported as the long-term liabilities in the balance sheet. The bonds are issued at a…

Answered: Required Information P10-10 (Algo)…

Excel Applications for Accounting Principles

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ChapterMB: Model-building Problems

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Aggies Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018, and received $540,000. Interest is payable semi-annually. The premium is amortized using the straight-line 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 premium
Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $540,000. Interest is payable annually. The premium is amortized using the straightline method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. June 30, 2019: entry to record payment of interest to bondholders C. June 30, 2019: entry to record amortization of premium D. June 30, 2020: entry to record payment of interest to bondholders E. June 30, 2020: entry to record amortization of premium
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?
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.
Bats Corporation issued 800,000 of 12% face value bonds for 851,705.70. The bonds were dated and issued on April 1, 2019, are due March 31, 2023, and pay interest semiannually on September 30 and March 31. Bats sold the bonds to yield 10%. Required: 1. Prepare a bond interest expense and premium amortization schedule using the straight-line method. 2. Prepare a bond interest expense and premium amortization schedule using the effective interest method. 3. Prepare any 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. Assume the company retires the bonds on June 30, 2020, at 103 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
Required Information P10-10 (Algo) Preparing a Bond Amortization Schedule for a Bond Issued at a Premium LO10-5 [The following information applies to the questions displayed below.] On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective-interest amortization method. The partially completed amortization schedule below pertains to the bonds: Interest $ 1,661 ? ? 1,640 Date January 1, Year 1 End of Year 1 End of Year 2 End of Year 3 End of Year 4 P10-10 Part 8 Year 2 Year 3 Cash $ 1,792 ? ? ? Amortization $ 131 ? 145 ? 8. What amount of interest expense will be reported on the income statement for Year 2 and Year 3? (Round your final answers to nearest whole dollar amount.) Interest Expense Balance $ 32,566 32,435 32,297 ? 32,000
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! Required information P10-10 (Algo) Preparing a Bond Amortization Schedule for a Bond Issued at a Premium LO10-5 [The following information applies to the questions displayed below.] On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective-interest amortization method. The partially completed amortization schedule below pertains to the bonds: 1/1/20x1 12/31/20x1 12/31/20x2 12/31/20x3 12/31/20x4 Date P10-10 Part 1 Date 1/1/20x1 12/31/20x1 12/31/20x2 12/31/20x3 12/31/20x4 $ Cash $ 1,792 ? ? ? Required: 1. Complete the amortization schedule. Note: Enter all your values in positive. Round your final answers to nearest whole dollar amount. Cash 1,792 $ $ Interest $ 1,661 ? ? 1,640 Interest 1,661 $ 1,640 Amortization $ 131 ? 145 ? Amortization $ $ 131 $ $ 145 $ Balance 32,566 32,435 32,297 Balance $ 32,566 32,435 32,297 ? 32,000 32,000
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Based on Question No. 1, I want answer of Question No. 2 On September 1, Deutsch Limited issues 8%, 5-year bonds payable with a maturity value of OR 20,000. The bonds sell at 98 and pay interest on March 1 and September Deutsch amortize bond discount by the straight-line method. Required: Journalize the issuance of the bonds on September 1, and the semiannual interest payment on March 1 and September 1. Answer: Bonds: Bonds are a kind of interest-bearing notes payable, usually issued by companies, universities, and governmental organizations. It is a debt instrument used for the purpose of raising a fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If the selling price of the bond is lesser than the face value, it is known as a discount on bond. If the selling price of the bond is greater than the face value, it is known as premium on bond. 2. What are the two categories of liabilities…

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