Sunset Drive-Ins Ltd. borrowed money by issuing $4,500,000 of 6% bonds payable at 92.5 on July 1, 2021. The bonds are 10-year bonds and pay interest each January 1 and July 1. Read the requirements 1. How much cash did Sunset receive when it issued the bonds payable? Joumalize this transaction When the bonds payable were issued, Sunset received CHED Requirements 1. How much cash did Sunset receive when it issued the bonds payable? Journalize this transaction. 2. How much must Sunset pay back at maturity? When is the maturity date? 3. How much cash interest will Sunset pay each six months? 4. How much interest expense will Sunset report each six months? Use the straight-line amortization method. Joumalize the entries for the accrual of interest and amortization of discount on December 31, 2021, and the payment of interest on January 1, 2022 Print Done X

Sunset Drive-Ins Ltd. borrowed money by issuing $4,500,000 of 6% bonds payable at 92.5 on July 1, 2021. The bonds are 10-year bonds and pay interest each January 1 and July 1. Read the requirements 1. How much cash did Sunset receive when it issued the bonds payable? Joumalize this transaction When the bonds payable were issued, Sunset received CHED Requirements 1. How much cash did Sunset receive when it issued the bonds payable? Journalize this transaction. 2. How much must Sunset pay back at maturity? When is the maturity date? 3. How much cash interest will Sunset pay each six months? 4. How much interest expense will Sunset report each six months? Use the straight-line amortization method. Joumalize the entries for the accrual of interest and amortization of discount on December 31, 2021, and the payment of interest on January 1, 2022 Print Done X

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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Question

Vaibh

Sunset Drive-Ins Ltd. borrowed money by issuing $4,500,000 of 6% bonds payable at 92.5 on July 1, 2021. The bonds are 10-year bonds and pay interest each January 1 and July 1.
Read the requirements
1. How much cash did Sunset receive when it issued the bonds payable? Joumalize this transaction
When the bonds payable were issued, Sunset received
Requirements
1. How much cash did Sunset receive when it issued the bonds payable?
Journalize this transaction.
2
3.
4.
How much must Sunset pay back at maturity? When is the maturity date?
How much cash interest will Sunset pay each six months?
CELER
How much interest expense will Sunset report each six months? Use
the straight-line amortization method. Journalize the entries for the accrual of
interest and amortization of discount on December 31, 2021, and the
payment of interest on January 1, 2022.
Print
Done

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Step 1: Define Bonds is important

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Step 2: 1) The issue price of the bonds is calculated as follows

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Step 3: 2) The presentation of the money pay at maturity and the maturity date is as follows-

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Step 4: 3) The calculation of the interest that sunset pay to each month is as follows-

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Step 5: 4) The journal entries for accrual of interest and payment is presented as follows-

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