The Duros Corp issued a $1,000,000, 5%, 10 year bond at 105. This pays interest annually and the company uses a straight-line amortization for all premiums and discounts. Which entry properly reflects the payment of the first year of interest and proper treatment of the premium or discount (if applicable)? Question 9 options: Interest Expense Cash 50000 50000 Interest Expense 55000 Discount on Bonds Payable Cash 50000 Interest Expense 47500 Premium on Bonds Payable Cash 52500 Interest Expense 45000 Premium on Bonds Payable Cash 50000 5000 5000 5000

The Duros Corp issued a $1,000,000, 5%, 10 year bond at 105. This pays interest annually and the company uses a straight-line amortization for all premiums and discounts. Which entry properly reflects the payment of the first year of interest and proper treatment of the premium or discount (if applicable)? Question 9 options: Interest Expense Cash 50000 50000 Interest Expense 55000 Discount on Bonds Payable Cash 50000 Interest Expense 47500 Premium on Bonds Payable Cash 52500 Interest Expense 45000 Premium on Bonds Payable Cash 50000 5000 5000 5000

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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26. Bonds Issued at a Premium (Effective Interest) Charger Battery issued $100,000 of 11%, seven-year bonds on December 31, 2022, for $104,868. Interest is paid annually on December 31. The market rate of interest is 10%. Required: Prepare the amortization table using the effective interest rate method. For those boxes in which no entry is required, leave the box blank. If the amount is zero, enter "0". If required, round your answers to the nearest whole dollar.
Required information Skip to question [The following information applies to the questions displayed below.] Legacy issues $325,000 of 5%, four-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $292,181 when the market rate is 8%. 2. Determine the total bond interest expense to be recognized over the bonds' life. Total bond interest expense over life of bonds: Amount repaid: payments of Par value at maturity Total repaid Less amount borrowed Total bond interest expense
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An accounting example: Otter Products inc issued bonds on January 1, 2019. Interest to be paid semi-annually. Term in years is 2; Face value of bonds issued is $200,000; Issue Price $206,000; Specified Interest Rate each payment period is 6% Question. Calculate a. the amount of interest paid in cash every payment period. b. The amount of amortization to be recorded at each interest payment date (use straight-line method) c. complete amoritzation table by calculating interest expense and beginning and ending bond carrying amounts at the each period over 2 years. The term is for 2 years however 3 years is showing on the workbook. How do I calcuate the 3rd year if the problem only says the term is 2 years?
QUESTION Part A) On January 1, 2023 its issue date, Diogenes Inc. purchased a 9%, $200,000, 10-year bond. Interest is paid annually on December 31. Diogenes uses the amortized cost model and the effective interest method for amortizing premium or discount. The current market rate was 10% and as a result Diogenes paid $187,711 for the bonds. On December 31, 2023, the bonds have a market value of $185,000. Diogenes applies IFRS. Instructions Record the receipt of interest for 2023. Part B) Zeus Corporation is considering making a significant long-term investment in Ares Ltd., a young and very promising company. Zeus decides to make a smaller investment first, and if Ares turns out to be successful, Zeus intends to make an additional investment to reach significant influence. Ares has 110,000 shares outstanding. On January 1, 2023, Ares issues Zeus 10,000 shares for $400,000 in cash (so now there are 120,000 shares outstanding). Additional information: 1. On November 1, 2023, Ares…