Entries for issuing bonds and amortizing premium by straight-line methodSmiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley issued $8,100,000 of 5-year, 12% bonds at a market (effective) interest rate of 10%, receiving cash of $8,725,460. Interest is payablesemiannually on April 1 and October 1.a. Journalize the entry to record the issuance of bonds on April 1, 20Y1. If an amount box does not require an entry, leave it blank.CashPremium on Bonds PayableBonds Payable ✓Feedback✓Interest Expense✓Premium on Bonds PayableCash✓✓ Check My WorkBonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account.The straight-line method of amortization provides equal amounts of amortization over the life of the bond.Feedback8,725,460b. Journalize the entry to record the first interest payment on October 1, 20Y1, and amortization of bond premium for 6 months, using the straight-line method. Round to the nearest dollar. If an amount box does not require an entry,leave it blank.✓8,100,000EE4

The bonds payable are the long term liabilities for the business. The premium on bonds payable is…

Answered: Smiley Corporation wholesales repair…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Kingbird, Inc. issues $4.1 million, 10-year. 9% bonds at 102, with interest payable on January 1. The straight-line method is used to amortize bond premium (a) Your answer is partially correct Prepare the journal entry to record the sale of these bonds on January 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually) Date Account Tities and Explanation Jan 1 Cash Premium on Bonds Payable Bons Payable Debit 369000 82000 Credit 4100000
Sheridan Products Ltd. issued bonds and received proceeds of $53,124,565. The bonds mature in 13 years and carry a 8% interest rate paid semi-annually. The bonds were issued at a price of 95.035 to yield 8.643%. (a) Show the journal entry to record the issuance of the bonds. (Credit account titles are automatically Indented when 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. List debit entry before credit entry.) Account Titles and Explanation Debit Credit
Hillside issues $1,900,000 of 5%, 15-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,641,812. Required: 1. Prepare the January 1 journal entry to record the bonds’ issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization. 2(c) For each semiannual period, complete the table below to calculate the bond interest expense. 3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 4. Prepare the first two years of a straight-line amortization table. 5. Prepare the journal entries to record the first two interest payments.
On the first day of the fiscal year, a company issues a $784,000, 6%, 10-year bond that pays semiannual interest of $23,520 ($784,000 x 6% x 1/2), receiving cash of $823,200. Journalize the entry for the first interest payment and amortization of premium using the straight-line method. If an amount box does not require an entry, leave it blank. OUD
Salt Foods purchases forty $1,000, 7%, 10-year bonds issued by Pretzelmania, Inc., for $37,282 on January 1. The market interest rate for bonds of similar risk and maturity is 8%. Salt Foods receives interest semiannually on June 30 and December 31.1. & 2. Record the necessary entries regarding the bonds.
On the first day of the fiscal year, a company issues a $8,800,000, 11%, 7-year bond that pays semiannual interest of $484,000 ($8,800,000 × 11% × ½), receiving cash of $9,235,540. Journalize the bond issuance. If an amount box does not require an entry, leave it blank.
Issuing Bonds at a Discount On the first day of the fiscal year, a company issues a $6,800,000, 8%, 10-year bond that pays semiannual interest of $272,000 ($6,800,000 x 8% x 2), receiving cash of $5,952,570. Journalize the entry to record the issuance of the bonds. If an amount box does not require an entry, leave it blank.
On the first day of the fiscal year, a company issues a $883,000, 10%, 10-year bond that pays semiannual interest of $44,150 ($883,000 x 10% x 1/2), receiving cash of $927,200. Journalize the entry to record the first interest payment and amortization of premium using the straight-line method. If an amount box does not require an entry, leave it blank. - Select - - Select - - Select - - Select - - Select - - Select -
On the first day of the fiscal year, a company issues a $4,900,000, 6%, 6-year bond that pays semiannual interest of $147,000 ($4,900,000 × 6% × ½), receiving cash of $4,440,130. Journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.
On January 1, the first day of the fiscal year, Designer Fabric Inc. issues a $5,000,000, 6%, 10-year bond that pays semiannual interest of $150,000 ($5,000,000 × 6% × ½ year), receiving cash of $5,000,000. a. Journalize the entry to record the issuance of the bonds. If an amount box does not require an entry, leave it blank. b. Journalize the entry to record the first interest payment on June 30. If an amount box does not require an entry, leave it blank. c. Journalize the entry to record the payment of the principal on the maturity date. If an amount box does not require an entry, leave it blank.
On the first day of the fiscal year, a company issues a $1,100,000, 6%, 9-year bond that pays semiannual interest of $33,000 ($1,100,000 × 6% × ½), receiving cash of $1,178,944. Journalize the bond issuance. If an amount box does not require an entry, leave it blank. Interest Expense Premium on Bonds Payable Cash
Hillside issues $4,000,000 of 6%, 15-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,456,448. Required: 1. Prepare the January 1 journal entry to record the bonds' issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization. 2(c) For each semiannual period, complete the table below to calculate the bond interest expense. 3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 4. Prepare the first two years of a straight-line amortization table. 5. Prepare the journal entries to record the first two interest payments. Complete this question by entering your answers in the tabs below. Req 1 Req 2A to 2C Req 3 Req 4 Req 5 Complete the below table to calculate the total bond interest expense to be…

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS