The amount of discount amortized on July 1,2019 is
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Discount on the issue of Bonds = Face Value - Proceeds from issue of Bonds
Amount of Discount Amortized = Discount on the issue of Bonds/Number of Periods
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- On January 1, 2019, Company C issues $200,000 of its 6% bonds which mature in 10 years. Interest is paid annually on December 31. The market (effective) rate of interest is 4%. If the bond sells as 88.2, what the amount of interest expense reported on the Income Statement for 2019 (hint: prepare an amortization schedule)On January 1, 2025, Entity D issued $1,000,000 of 7%, 5-year bonds at 98. The bonds pay interest annually on December 31 and Entity D amortizes any premium or discount using the straight-line method. What is the annual interest expense on the bonds? $66,000. $74,000. $4,000. $70,000.Shaq Corporation issued $10,000 of 20-year bonds on January 1, 2024. The bonds pay interest semiannually. This is a partial bond amortization schedule for the bonds. Payment Cash Effectiveinterest Increase in balance Outstandingbalance 9,080 1 400 409 9 9,089 2 400 409 9 9,098 3 400 409 9 9,107 4 400 410 10 9,117 What is the effective annual rate of interest on the bonds?
- The effectivę interest method of amortization is used. The Iterest is payable annually on December 31. The bonds Prepare journal entries for 2019. bonds have a 10% effective yield. Problem 20-4 (IAA) On January 1, 2019, Fancy Company acquired P8.000,000 12% bonds to be held as financial assets al amortized cost for P8,400,000 plus transaction cost of P198,400. terest is payable annually on December 31. The bonds mature on January 1, 2024. Required:On January 1, 2021, Lizzy’s Lemonade issues 5%, 20-year bonds with a face amount of $100,000 for $88,443, priced to yield 6%. Interest is paid semiannually. What amount of interest expense will be recorded on June 30, 2021, the first interest payment date?On January 1, 2019, Legion Company sold OMR 50,000 of 10% ten-year bonds. Interest is payable semiannually on June 30 and December 31. The bonds were sold for OMR 43,000, priced to yield 12%. Legion records interest at the effective rate. Legion should report bond interest expense for the six months ended June 30, 2019, in the amount of: Select one: a. OMR 2,500 b. OMR 2,150 c. OMR 3,000 d. OMR 2,580
- A company issues four-year bonds with a $114,000 par value on January 1, 2021, at a price of $109,870. The annual contract rate is 5%, and interest is paid semiannually on June 30 and December 31. Prepare a straight-line amortization table for these bonds. (Round your answers to the nearest dollar amount.) Semiannual Period-End Unamortized Discount Carrying Value 1/01/2021 6/30/2021 12/31/2021 6/30/2022 12/31/2022 6/30/2023 12/31/2023 6/30/2024 12/31/2024On January 1, $980,000, 5-year, 10% bonds were issued for $950,600. Interest is paid semiannually on January 1 and July 1. If the issuing company uses the straight-line method to amortize a discount on bonds payable, the semiannual amortization amount isOn January 1, 2019, Ellison Co. issued 3-year, 10%, $200,000 face value bonds. The bonds were issued at 95.0827 , the interest payable semiannually on July 1 and January 1. The bonds were sold to yield 12%. On July 1, 2020 The company retire 60% of the bonds at 102. a) Complete the following table: Cash Paid Carrying amount of Interest Discount Date Expense Amortization bonds January 1, 2019 July 1, 2019 January 1, 2020 July 1, 2020 January 1, 2021 July 1, 2021 January 1, 2022 b) Journalize the required entries on the following dates January 1, 2019 July 1, 2019 December 31, 2019 – adjusting entry January 1, 2020 July 1, 2020 The payment of interest July 1, 2020 the retirement of 60% of the bonds at 102 December 31, 2020 – adjusting entry
- On January 1, 2020, Martinez Corporation issued $570,000 of 9% bonds, due in 8 years. The bonds were issued for $603,210, and pay interest each July 1 and January 1. The effective-interest rate is 8%.Prepare the company’s journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Martinez uses the effective-interest method. ( No. Date Account Titles and Explanation Debit Credit (a) Jan. 1, 2020July 1, 2020Dec. 31, 2020 (b) Jan. 1, 2020July 1, 2020Dec. 31, 2020 (c) Jan. 1, 2020July 1, 2020Dec. 31, 2020On January 1, 2020, Huber Co. sold 12% bonds with a face value of $2,000,000. The bonds mature in five years, and interest is paid semiannually on June 30 and December 31. The bonds were sold for $2,154,500 to yield 10%. Using the effective-interest method of amortization, interest expense for 2020 is: show steps pleaseAggies Inc. issued bonds with a $450,000 face value, 8% interest rate, and a 4-year term on July 1, 2018, and received $510,000. Interest is payable semi-annually. The premium is amortized using the straight-line method. A. July 1, 2018: entry to record issuing the bonds B. Dec. 31, 2018: entry to record payment of interest to bondholders C. Dec. 31, 2018: entry to record amortization of premium Prepare journal entries for the above transactions. If an amount box does not require an entry, leave it blank. A. fill in the blank 2 fill in the blank 3 fill in the blank 5 fill in the blank 6 fill in the blank 8 fill in the blank 9 B. fill in the blank 11 fill in the blank 12 fill in the blank 14 fill in the blank 15 C.
