The Gorman Group issued $900,000 of 13% bonds on June 30, 2021, for $967707. The bonds were dated on June 30 and mature on June 30, 2041 (20 years). The market yield for bonds of similar risk and maturity is 12%. Interest is paid semiannually on December 31 and June 30. Required: 1. to 3. Prepare the journal entries to record their issuance by The Gorman Group on June 30, 2021, interest on December 31, 2021 and interest on June 30, 2022 (at the effective rate). View transaction list Journal entry worksheet 1 2 Record the issuance of the bond on June 30, 2021. 3 Note: Enter debits before credits. Date June 30, 2021 Record entry General Journal Clear entry Debit Credit View general journal

The Gorman Group issued $900,000 of 13% bonds on June 30, 2021, for $967707. The bonds were dated on June 30 and mature on June 30, 2041 (20 years). The market yield for bonds of similar risk and maturity is 12%. Interest is paid semiannually on December 31 and June 30. Required: 1. to 3. Prepare the journal entries to record their issuance by The Gorman Group on June 30, 2021, interest on December 31, 2021 and interest on June 30, 2022 (at the effective rate). View transaction list Journal entry worksheet 1 2 Record the issuance of the bond on June 30, 2021. 3 Note: Enter debits before credits. Date June 30, 2021 Record entry General Journal Clear entry Debit Credit View general journal

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

6. Farhan Corporation issued $ 1,000,000 of 8%, 28-year bond on January 1, 2020, at 84.95 to yield 8%. Interest is payable semi-annually on July 1 and January 1. Prepare journal entries to record following: (a) The issuance of bonds (b) The payment of interest and related amortization on July 1, 2020 (c) The accrual of interest and related amortization on December 31, 2020
On January 1, 2019, Drennen Inc. issued $5 million face amount of 10-year, 14% stated rate bonds when market interest rates were 12%. The bonds pay semiannual interest each June 30 and December 31 and mature on December 31, 2028. Table 6-4, Table 6-5 (Use appropriate factor from the table provided.) Required:a. Calculate the proceeds (issue price) of Drennen Inc.'s bonds on January 1, 2019, assuming that the bonds were sold to provide a market rate of return to the investor. (Round PV factor to 4 decimal places.) b-1.Assume instead that the proceeds were $4,820,000. Use the horizontal model to record the payment of semiannual interest and the related discount amortization on June 30, 2019, assuming that the discount of $180,000 is amortized on a straight-line basis. Indicate the financial statement effect.(Enter decreases with a minus sign to indicate a negative financial statement effect.) b-2. Assume instead that the proceeds were $4,820,000. Record the journal entry to show the…
The Pearl Company issued $240,000 of 10% bonds on January 1, 2025. The bonds are due January 1, 2030, with interest payable each July 1 and January 1. The bonds are issued at face value. Prepare Pearl's journal entries for (a) the January issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) No. (a) (b) (c) Date Account Titles and Explanation Debit Cred
On April 1, 2019, Ellison Co. issued 4-year, 7%, $100,000 face value bonds. The bonds were issued at 107.0919 , the interest payable annually on April 1. The bonds were sold to yield 5%. a) Complete the following table: Carrying Cash Interest Premium Date amount of Paid Expense Amortization bonds April 1 2019 April 1 2020 April 1 2021 April 1 2022 April 1 2023 b) Journalize the required entries on the following dates April 1, 2019 December 31, 2019 – adjusting entry April 1, 2020 2
On March 31, 2021, Gardner Corporation received authorization to issue $50,000 of 9 percent, 30-year bonds payable. The bonds pay interest on March 31 and September 30. The entire issue was dated March 31, 2021, but the bonds were not issued until April 30, 2021. They were issued at face value. a. Prepare the journal entry at April 30, 2021, to record the sale of the bonds. b. Prepare the journal entry at September 30, 2021, to record the semiannual bond interest payment. c. Prepare the adjusting entry at December 31, 2021, to record bond interest expense accrued since September 30, 2021. (Assume that no monthly adjusting entries to accrue interest expense had been made prior Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
On January 1, 2021, Sunrise Corporation issued $4,000,000, 8%, 5-year bonds dated January 1, 2021, at 95. The bonds pay annual interest on January 1. The company uses the straight-line method of amortization and has a calendar year end. Prepare all the journal entries that Sunrise Corporation would make related to this bond issue through January 1, 2022. Be sure to indicate the date on which the entries would be made. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation
On January 1, 2021, Hobart Services Ltd. issued $200,000 of 7% bonds at 98.Bonds are due January 1, 2026, with interest payable semi-annually on July 1 andJanuary 1.Required:• Calculate the bond price & the effective interest rate for the semi-annualinterest payments• Prepare a bond amortization schedule for the life of the bond• Prepare all the journal entries relating to the bond for 2021• Prepare a classified partial balance sheet as at December 3
On January 1, 2021, Instaform, Inc., issued 10% bonds with a face amount of $50 million, dated January 1. The bonds mature in 2040 (20 years). The market yield for bonds of similar risk and maturity is 12%. Interest is paid semiannually.Required:1. Determine the price of the bonds at January 1, 2021, and prepare the journal entry to record their issuance by Instaform.2. Assume the market rate was 9%. Determine the price of the bonds at January 1, 2021, and prepare the journal entry to record their issuance by Instaform.3. Assume Broadcourt Electronics purchased the entire issue in a private placement of the bonds. Using the data in requirement 2, prepare the journal entry to record the purchase by Broadcourt.
Marigold Corporation issued $660,000 of 6% bonds on May 1,2025 . The bonds were dated January 1,2025 , and mature January 1 , 2028 , with interest payable July 1 and January 1 . The bonds were issued at face value plus accrued interest. Prepare Marigold's journal entries for (a) the May 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry.
Devers Corporation issued $400,000 of 6% bonds on May 1, 2020. The bonds were dated January 1, 2020, and mature January 1, 2023, with interest payable July 1 and January 1. The bonds were issued at face value plus accrued interest. Prepare Devers's journal entries for (a) the May 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry.
On March 31, 2021, Gardner Corporation received authorization to issue $80,000 of 9 percent, 30-year bonds payable. The bonds pay interest on March 31 and September 30. The entire issue was dated March 31, 2021, but the bonds were not issued until April 30, 2021. They were issued at face value. a. Prepare the journal entry at April 30, 2021, to record the sale of the bonds. b. Prepare the journal entry at September 30, 2021, to record the semiannual bond interest payment. c. Prepare the adjusting entry at December 31, 2021, to record bond interest expense accrued since September 30, 2021. (Assume that no monthly adjusting entries to accrue interest expense had been made prior to December 31, 2021.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 Record the sale of bonds. Note: Enter debits before credits. Date Apr 30, 2021 Record entry General Journal Clear entry Debit…