KSavvy Drive-Ins borrowed money by issuing $3,500,000 of 9% bonds payable at 99.5. Interest is paid semiannually.Requirements1. How much cash did Savvy receive when it issued the bonds payable?2. How much must Savvy pay back at maturity?3. How much cash interest will Savvy pay each six months?Requirement 1. How much cash did Savvy receive when it issued the bonds payable?Amount of cash Savvy received when the bonds payable were issued =

Bonds payable is a type of instrument where by an amount is borrowed for a fixed period with fixed…

Answered: Savvy Drive-Ins borrowed money by…

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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1. Beluga Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the market rate was 6%. Interest was paid semi-annually. What is the amount of interest payments every 6 months? PLEASE NOTE: All dollar amounts will be rounded to whole dollars with "$" and commas as needed (i.e. $12,345).
Mike Drago took out a for $3,900 at the Gold Coast Bank for 270 days. If the bank uses the ordinary interest method, what rate (in %) of interest was charged if the amount of interest was $239? Round your answer to the nearest tenth of a percent.
17. Walnut company received from a customer an 1-year, P200,000 note bearing annual interest of 8%. After holding the note for 8 months,Walnut discounted the note at a local bank at an effective rate of 12%. What is the maturity value of the note? a. 216,000 b. 169,500 c. 200,000 d. 226,000
Use the ordinary interest method, 360 days, to solve the following word problem. Round to the nearest cent when necessary. Roni Lockard signed a $28,500 simple discount promissory note at a certain bank. The discount rate was 13%, and the note was made on February 18 (not in a leap-year) for 116 days. (a) What proceeds (in $) will Roni receive on the note? $ (b) What is the maturity date of the note?
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s
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Use the following to answer questions 8-10 (Round answers to the nearest dollar) The company issues 9%, 10-year bonds with a total face amount of $100,000. The market interest rate for bonds of similar risk and maturity is 9%. Interest is paid semiannually. What is the issue price of the bond? When the company records the 2nd interest payment, how much will the company record for 8. $ 9. $ interest expense? 10. $ . What is the bond liability (carrying amount) after the 2nd interest payment?
- 3 S14-5 Determining bond amounts Savvy Drive-Ins borrowed money by issuing $3,500,000 of 9% bonds payable at 99.5. Interest is paid semiannually. Requirements 1. How much cash did Savvy receive when it issued the bonds payable? 2. How much must Savvy pay back at maturity? 3. How much cash interest will Savvy pay each six months? S14 6
What account would be debited (1), what account would be credit (2), and what amount would be paid to record the journal entry for each interest payment based on a $200,000 five-year, 10% bond and the bond was issued at $192,462 (11%) and interest is paid semiannually? JOURNAL Page 25 DATE DESCRIPTION P.REF. DEBIT CREDIT (1) ? (2) ? (1) Interest Expense debit $11,000, and (2) Cash credit $11,000 (1) Interest Expense debit $10,000 and (2) Cash credit $10,000 (1) Cash debit $20,000 and (2) Interest Expense credit $20,000 (1) Cash debit $22,000, and (2) Interest Expense credit $22,000

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Savvy Drive-Ins borrowed money by issuing $3,500,000 of 9% bonds payable at 99.5. Interest is paid semiannually. Requirements 1. How much cash did Savvy receive when it issued the bonds payable? 2. How much must Savvy pay back at maturity? 3. How much cash interest will Savvy pay each six months?