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Rodgers Gridiron Co. produces and sells football equipment. On July 1, 2011, Rodgers issued $65,000,000 of 10-year, 12% bonds at a market (effective) interest rate of 10%, receiving cash of $73,100,469. Interest on the bonds is payable semiannually on Decemb June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds. 2011 July 1 Cash Premium on Bonds Payable Bonds Payable ✓ 73,100,469 8,100,469 ✔ 65,000,000 ✓

Rodgers Gridiron Co. produces and sells football equipment. On July 1, 2011, Rodgers issued $65,000,000 of 10-year, 12% bonds at a market (effective) interest rate of 10%, receiving cash of $73,100,469. Interest on the bonds is payable semiannually on Decemb June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds. 2011 July 1 Cash Premium on Bonds Payable Bonds Payable ✓ 73,100,469 8,100,469 ✔ 65,000,000 ✓

FINANCIAL ACCOUNTING
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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Rodgers Gridiron Co. produces and sells football equipment. On July 1, 20Y1, Rodgers issued $65,000,000 of 10-year, 12% bonds at a market (effective) interest rate of 10%, receiving cash of $73,100,469. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds. 2011 July 1 Cash Feedback ✓ Premium on Bonds Payable Bonds Payable ✓ Check My Work Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. 20Y1 Dec. 31 Interest Expense Feedback 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 2011, and the amortization of the bond premium, using the interest method. Round to the nearest dollar. Premium on Bonds Payable Cash 73,100,469 ✔ Check My Work ✓ 8,100,469 ✔ 65,000,000 405,023 X 3,900,000 ✓
Transcribed Image Text:Rodgers Gridiron Co. produces and sells football equipment. On July 1, 20Y1, Rodgers issued $65,000,000 of 10-year, 12% bonds at a market (effective) interest rate of 10%, receiving cash of $73,100,469. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds. 2011 July 1 Cash Feedback ✓ Premium on Bonds Payable Bonds Payable ✓ Check My Work Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. 20Y1 Dec. 31 Interest Expense Feedback 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 2011, and the amortization of the bond premium, using the interest method. Round to the nearest dollar. Premium on Bonds Payable Cash 73,100,469 ✔ Check My Work ✓ 8,100,469 ✔ 65,000,000 405,023 X 3,900,000 ✓
b. The interest payment on June 30, 2012, and the amortization of the bond premium, using the interest method. Round to the nearest dollar. 2012 June 30 Interest Expense Feedback Premium on Bonds Payable Cash 3,494,977 X 405,023 X Feedback Check My Work 2b. Cash received (- premium amortized Dec. 31, 20Y1) x semiannual market rate= Interest Expense (debit). Principal x semiannual contract rate = cash paid (credit). The premium amortized (debit) is the difference between the two amounts. 3,900,000 3. Determine the total interest expense for 2011. Round to the nearest dollar. 73,100,469 X Check My Work 3. 2011 Interest expense is the amount debited in 2(a).
Transcribed Image Text:b. The interest payment on June 30, 2012, and the amortization of the bond premium, using the interest method. Round to the nearest dollar. 2012 June 30 Interest Expense Feedback Premium on Bonds Payable Cash 3,494,977 X 405,023 X Feedback Check My Work 2b. Cash received (- premium amortized Dec. 31, 20Y1) x semiannual market rate= Interest Expense (debit). Principal x semiannual contract rate = cash paid (credit). The premium amortized (debit) is the difference between the two amounts. 3,900,000 3. Determine the total interest expense for 2011. Round to the nearest dollar. 73,100,469 X Check My Work 3. 2011 Interest expense is the amount debited in 2(a).
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