Swiss Inc. sold 20-year bonds with a total face amount of $401,000 and a stated rate of 7.5%. The bonds sold for $425,000 on January 1, 2024, and pay interest semiannually on June 30 and December 31. Required: 1. Prepare the entry to recognize the sale of the bonds. If an amount box does not require an entry, leave it blank. 2024 Jan. 1 (Record issuance of bonds at premium.) 2. Determine the amount of the semiannual interest payment required by the bonds. Round your answer to the nearest whole dollar and use the same in subsequent calculations. 3. Prepare the journal entry made by Swiss at June 30, 2024, to recognize the interest expense and an interest payment. If an amount box does not require an en leave it blank. 2024 June 30 88 (Record interest expense.) 4. Determine the amount of interest expense for 2024.
Swiss Inc. sold 20-year bonds with a total face amount of $401,000 and a stated rate of 7.5%. The bonds sold for $425,000 on January 1, 2024, and pay interest semiannually on June 30 and December 31. Required: 1. Prepare the entry to recognize the sale of the bonds. If an amount box does not require an entry, leave it blank. 2024 Jan. 1 (Record issuance of bonds at premium.) 2. Determine the amount of the semiannual interest payment required by the bonds. Round your answer to the nearest whole dollar and use the same in subsequent calculations. 3. Prepare the journal entry made by Swiss at June 30, 2024, to recognize the interest expense and an interest payment. If an amount box does not require an en leave it blank. 2024 June 30 88 (Record interest expense.) 4. Determine the amount of interest expense for 2024.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text:Swiss Inc. sold 20-year bonds with a total face amount of $401,000 and a stated rate of 7.5%. The bonds sold for $425,000 on January 1, 2024, and pay interest
semiannually on June 30 and December 31.
Required:
1. Prepare the entry to recognize the sale of the bonds. If an amount box does not require an entry, leave it blank.
2024 Jan. 1
(Record issuance of bonds at premium.).
2. Determine the amount of the semiannual interest payment required by the bonds. Round your answer to the nearest whole dollar and use the same in
subsequent calculations.
3. Prepare the journal entry made by Swiss at June 30, 2024, to recognize the interest expense and an interest payment. If an amount box does not require an entry,
leave it blank.
2024 June 30
88
(Record interest expense.)
4. Determine the amount of interest expense for 2024.
5. Conceptual Connection: If Swiss issued bonds with a variable interest rate, would you expect the market rate of interest (i.e., yield) to increase, decrease, or stay
same?
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