Sunland Water Company Ltd. needed to raise $69 million of additional capital to finance the expansion of its bottled water facility.After consulting an investment banker, it decided to issue bonds. The bonds had a face value of $69 million and an annual interest rateof 4.5%, paid semi-annually on June 30 and December 31, and will reach maturity on December 31, 2034. The bonds were issued at96.1 on January 1, 2025, for $66,309,000, which represented a yield of 5%.(b)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 beforecredit entry.)Account Titles and ExplanationDebitCredit

In the bond market, where investors trade existing bonds, bonds can be purchased and sold. Bond…

Answered: Sunland Water Company Ltd. needed to…

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

Vinubhai
[The following information applies to the questions displayed below.) On January 1, 2024, Splash City issues $380,000 of 8% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. Assuming the market interest rate on the issue date is 9%, the bonds will issue at $349,051. 2. Record the bond issue on January 1, 2024, and the first two semiannual interest payments on June 30, 2024, and December 31, 2024.
Required information [The following information applies to the questions displayed below.) On January 1, 2024, White Water issues $600,000 of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. The market interest rate on the issue date is 6% and the bonds issued at $644,632 Required: 1. Using an amortization schedule, show that the bonds have a carrying value of $633,887 on December 31, 2026. (Round your final answers to nearest whole dollar) Date 01/01/2024 06/30/2024 12/31/2024 06/30/2025 12/31/2025 06/30/2026 12/31/2026 Cash Paid Change in Expense Carrying Value Carrying Valua Check my wor
$400,000 is issued of 8-year, 4% bonds at par on January 1, 2022. The bonds pay interest annually. Compute the total cost of borrowing for this bond.
On the last day of its fiscal year ending December 31, 2016, the Sedgwick & Reams (S&R) Glass Company completed two financing arrangements. The funds provided by these initiatives will allow the company to expand its operations. 1. S&R issued 8% stated rate bonds with a face amount of $100 million. The bonds mature on December 31, 2036 (20 years). The market rate of interest for similar bond issues was 9% (4.5% semiannual rate). Interest is paid semiannually (4%) on June 30 and December 31, beginning on June 30, 2017. 2. The company leased two manufacturing facilities. Lease A requires 20 annual lease payments of $200,000 beginning on January 1, 2017. Lease B also is for 20 years, beginning January 1, 2017. Terms of the lease require 17 annual lease payments of $220,000 beginning on January 1, 2020. Generally accepted accounting principles require both leases to be recorded as liabilities for the present value of the scheduled payments. Assume that a 10% interest rate…
Flint Company had bonds outstanding with a maturity value of $272,000. On April 30, 2025, when these bonds had an unamortized discount of $10,000, they were called in at 105. To pay for these bonds, Flint had issued other bonds a month earlier bearing a lower interest rate. The newly issued bonds had a life of 10 years. The new bonds were issued at 103 (face value $272,000). Ignoring interest, compute the gain or loss. Loss ✓on redemption $ Ignoring interest, prepare the two entries to record this refunding transaction. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation Bonds Payable Loss on Redemption of Bonds Discount on Bonds Payable Cash (To record redemption of bonds payable) Cash Premium on Bonds Payable 23600 Bonds Payable Debit 272000 23600 Credit 10000…
Holly Industries, Inc. issued P6,000,000 of 8% debentures on May 1, 2019 and received cash totaling P5,323,577. The bonds pay interest semiannually on May 1 and November 1. The firm uses the effective-interest method of amortizing discounts and premiums. The bonds were sold to yield an effective-interest rate of 10%. Calculate the carrying amount of the bond on December 31, 2020.
Blossom Company issued $700,000, 9-year bonds. It agreed to make annual deposits of $75,500 to a fund (called a sinking fund), which will be used to pay off the principal amount of the bond at the end of 9 years. The deposits are made at the end of each year into an account paying 4% annual interest. Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) What amount will be in the sinking fund at the end of 9 years? (Round answer to 2 decimal places, e.g. 25.25.) Amount in the sinking fund $ 803100.94
Pinder Co. produces and sells high-quality video equipment. To finance its operations, Pinder issued $30,000,000 of four-year, 9% bonds, with interest payable semiannually, at a market (effective) interest rate of 10%. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. Determine the present value of the bonds payable. Round your answer to the nearest dollar.
On January 1, 2020, Bramble Corporation issued $5,130,000 of 10% bonds at 102 due December 31, 2029. Bramble paid $81,000 in bond issue costs when the bonds were issue to the market. These will be amortized over the life of the bond. The premium on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable "interest method".) The bonds are callable at 104 (i.e., at 104% of face amount), and on January 2, 2025, Bramble called one-half of the bonds and retired them. Ignoring income taxes, compute the amount of loss, if any, to be recognized by Bramble as a result of retiring the $2,565,000 of bonds in 2025. Loss on redemption Prepare the journal entry to record the retirement. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries…
On March 1, 2024, Baddour, Incorporated, issued 10% bonds, dated January 1, with a face amount of $160 million. The bonds were priced at $142.00 million (plus accrued interest) to yield 12%. The price if issued on January 1 would have been $139.25 million. Interest is paid semiannually on June 30 and December 31. Baddour’s fiscal year ends September 30. Required: 1. to 3. What would be the amount(s) related to the bonds Baddour would report in its balance sheet, income statement and statement of cash flows for the year ended September 30, 2024?
Answer all parts. Thank you!

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