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Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method
On the first day of its fiscal year, Chin Company issued $10,000,000 of five-year, 7% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 8%, resulting in Chin receiving cash of $9,594,415.
Question Content Area
a.
- Issuance of the bonds.
- First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.)
- Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.)
Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. The straight-line method of amortization provides equal amounts of amortization over the life of the bond.
Question Content Area
b. Determine the amount of the bond interest expense for the first year.
NOTE: I am having trouble getting the correct bond interest expense for the first year.
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- Entries for Issuing Bonds and Amortizing Premium by Straight-Line Method Favreau Corporation wholesales repair products to equipment manufacturers. On April 1, Year 1, Favreau Corporation issued $3,600,000 of 6-year, 8% bonds at a market (effective) interest rate of 6%, receiving cash of $3,958,346. Interest is payable semiannually on April 1 and October 1. Question Content Area a. Journalize the entry to record the issuance of bonds on April 1. If an amount box does not require an entry, leave it blank. - Select - - Select - - Select - - Select - - Select - - Select - Question Content Area b. Journalize the entry to record the first interest payment on October 1 and amortization of bond premium for six months, using the straight-line method. The bond premium amortization is combined with the semiannual interest payment. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. - Select - - Select…for issuing bonds and amortizing premium by straight-line method Entries Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley issued $3,500,000 of 8-year, 10% bonds at a market (effective) interest rate of 8%, receiving cash of $3,907,830. Interest is payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 1, 20Y1. If an amount box does not require an entry, leave it blank. Debit Cash Account Premium on Bonds Payable Bonds Payable Feedback ►Check My Work 3,907,830 Interest Expense Premium on Bonds Payable Cash Debit b. Journalize the entry to record the first interest payment on October 1, 20Y1, and amortization of bond premium for 6 months, using the straight-line method. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Account Credit 154,609 X Credit 20,391 X 407,830 3,500,000 175,000Entries for Bonds Payable, including bond redemption The following transactions were completed by Montague Inc., whose fiscal year is the calendar year: 20Y1 July 1. Issued $55,000,000 of 10-year, 9% callable bonds dated July 1, 20Y1, at a market (effective) rate of 7%, receiving cash of $62,817,040. Interest is payable semiannually on December 31 and June 30. Dec. 31. Paid the semiannual interest on the bonds. The bond premium amortization of $390,852 is combined with the semiannual interest payment. 20Y2 June 30. Paid the semiannual interest on the bonds. The bond premium amortization of $390,852 is combined with the semiannual interest payment. Dec. 31. Paid the semiannual interest on the bonds. The bond premium amortization of $390,852 is combined with the semiannual interest payment. 20Y3 June 30. Recorded the redemption of the bonds, which were called at 103. The balance in the bond premium account is $6,253,632 after payment…
- Bond Premium, Entries for Bonds Payable Transactions Instructions Present Value Tables Chart of Accounts Journal Final Questions Instructions O'Halloran Inc. produces and sells outdoor equipment. On July 1, Year 1, O'Halloran Inc. issued $32,000,000 of six-year, 8% bonds at a market (effective) interest rate of 7%, receiving cash of $33,546,022. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1.* 2. Journalize the entries to record the following:* a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar. b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar. 3. Determine the total interest…Entries for Issuing Bonds and Amortizing Premium by Straight-Line Method Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley issued $3,200,000 of 6-year, 12% bonds at a market (effective) interest rate of 11%, receiving cash of $3,337,898. Interest is payable semiannually on April 1 and October 1. b. Journalize the entry to record the first interest payment on October 1, 20Y1, and amortization of bond premium for six months, using the straight-line method. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.Bond Discount, Entries for Bonds Payable Transactions On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $3,300,000 of 5-year, 11% bonds at a market (effective) interest rate of 12%, receiving cash of $3,178,543. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1. Cash fill in the blank 82c4590b0fc5027_2 fill in the blank 82c4590b0fc5027_3 Discount on Bonds Payable fill in the blank 82c4590b0fc5027_5 fill in the blank 82c4590b0fc5027_6 Bonds Payable fill in the blank 82c4590b0fc5027_8 fill in the blank 82c4590b0fc5027_9 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 20Y1, and…
- Entries for Issuing Bonds and Amortizing Premium by Straight-Line Method Favreau Corporation wholesales repair products to equipment manufacturers. On April 1, Year 1, Favreau Corporation issued $3,600,000 of 9-year, 10% bonds at a market (effective) interest rate of 9%, receiving cash of $3,818,878. Interest is payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 1. If an amount box does not require an entry, leave it blank. b. Journalize the entry to record the first interest payment on October 1 and amortization of bond premium for six months, using the straight-line method. The bond premium amortization is combined with the semiannual interest payment. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. c. Why was the company able to issue the bonds for $3,818,878 rather than for the face amount of $3,600,000? The market rate of interest is the contract rate of interest.Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $8,100,000 of 9-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $7,644,536. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 5. Compute the price of $7,644,536 received for the bonds by using Table 1, Table 2, Table 3 and Table 4. (Round to the nearest dollar.) Your total may vary slightly from the price given due to rounding differences. Present value of the face amount Present value of the semiannual interest payments Price received for the bondseBook Show Me How A Calculator Print Item Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1, Danzer Industries Inc. issued $6,600,000 of 9-year, 10% bonds at a market (effective) interest rate of 12%, receiving cash of $5,885,352. Interest on the bonds is payable semiannually, on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds fram the issuance of the bonds on July 1, Year 1. If an amount box does not require an entry, leave it blank. Cash Discount on Bonds Payable Bonds Payable 2. Journalize the entries to record the following: If an amount box does not require an entry, leave it blank. a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond discount, using the straight-line method. (Round your answer to the nearest dollar.) Feedbeck Check My Work ( Previous 8:45 AM 3/28/2020 00 00 00 00
- Entries for Issuing Bonds and Amortizing Premium by Straight-Line Method Daan Corporation wholesales repair products to equipment manufacturers. On April 1, 2016, Daan Corporation issued $3,600,000 of 9-year, 9% bonds at a market (effective) interest rate of 8%, receiving cash of $3,827,866. Interest is payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 1, 2016. For a compound transaction, if an amount box does not require an entry, leave it blank. Cash 3,827,866 Premium on Bonds Payable 3,600,000 X Bonds Payable 227,866 X Feedback V Check My Work Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. The straight-line method of amortization provides equal amounts of amortization over the life of the bond. b. Journalize the entry to record the first interest payment on October 1, 2016, and amortization of bond premium for six months, using the straight-line…Entries for Issuing Bonds and Amortizing Premium by Straight-Line Method Daan Corporation wholesales repair products to equipment manufacturers. On April 1, 2016, Daan Corporation issued $2,100,000 of 6-year, 6% bonds at a market (effective) interest rate of 3%, receiving cash of $2,443,587. Interest is payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 1, 2016. For a compound transaction, if an amount box does not require an entry, leave it blank. b. Journalize the entry to record the first interest payment on October 1, 2016, and amortization of bond premium for six months, using the straight-line method. The bond premium amortization is combined with the semiannual interest payment. (Round to the nearest dollar.) For a compound transaction, if an amount box does not require an entry, leave it blank. c. Why was the company able to issue the bonds for $2,443,587 rather than for the face amount of $2,100,000? The market rate…Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Jacinto Company issued $21,200,000 of five-year, 12% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 14%, resulting in Jacinto Company receiving cash of $19,711,014. a. Journalize the entries to record the following: 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount amortization is combined with the semiannual interest payment. 3. Second semiannual interest payment. The bond discount amortization is combined with the semiannual interest payment. If an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar. 1. 2. 3. b. Determine the amount of the bond interest expense for the first year. Round your answer to the nearest dollar. c. Why was the company able to issue the bonds…
