Skysong Inc. issued $880,000 of 10.25%, 19-year bonds on January 1, 2020, at 102. Interest is payable semi-annually on July 1 andJanuary 1. Skysong Inc. uses the effective interest method of amortization for any bond premium or discount. Assume an effectiveyield of 10.00%. (With a market rate of 10.00%, the issue price would be slightly higher. For simplicity, ignore this.)Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when the amount isentered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.)Date Account Titles and Explanation1/1/20DebitCredit Prepare the journal entry to record the payment of interest and the related amortization on July 1, 2020. (Credit account titles areautomatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titlesand enter o for the amounts.)Date Account Titles and Explanation7/1/20Debit12/31/20Prepare the journal entry to record the accrual of interest and the related amortization on December 31, 2020. (Round answers toO decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If noentry is required, select "No Entry" for the account titles and enter 0 for the amounts.)Date Account Titles and ExplanationCreditDebitCredit

Computation of the amount of proceed from issuance of bonds : Face value of bonds $880,000…

Skysong Inc. issued $880,000 of 10.25%. 19-year bonds on January 1, 2020, at 102. Interest is payable semi-annually on July 1 and January 1, Skysong Inc. uses the effective interest method of amortization for any bond premium or discount. Assume an effective yield of 10.00%. (With a market rate of 10.00%, the issue price would be slightly higher. For simplicity, ignore this.) Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation 1/1/20 Debit Credit

Skysong Inc. issued $880,000 of 10.25%. 19-year bonds on January 1, 2020, at 102. Interest is payable semi-annually on July 1 and January 1, Skysong Inc. uses the effective interest method of amortization for any bond premium or discount. Assume an effective yield of 10.00%. (With a market rate of 10.00%, the issue price would be slightly higher. For simplicity, ignore this.) Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation 1/1/20 Debit Credit

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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BlueLtd. Issued a $1,164,000, 10-year bond dated January 1, 2020. The bond was sold to yield 12% effective interest. The bond paid 10% interest on January 1 and July 1 each year. The company's year-end was December 31, and Blue followed IFRS. Using 1 factor Tables 2. a financial calculator, or 3. Excel function PV, calculate the amount received for the bond, and any discount or premium on the bond. Click here to view the tactor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITYOF 1 (For calculation purposes, use 5 decimal places as displayed in the factor table provided and final answers to 0 decimal places, e.g. 5,275.) Proceeds from sale of bond : on bond Prepare the journal entries for above transactions. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not Indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the…
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