Tolkien Company has $15,200 of 10% bond debentures outstanding. The bonds matures June 1, 2025. The company decides to retire the bonds 4 years before their maturity and buys all of them on the open market for 103 on June. The bonds were originally issued at par. Required 1: What is the amount of cash paid by Tolkien Company when retiring the bonds? Do not include interest on last coupon. $ Required 2: What is the gain (loss) on bond retirement to be recognized in the books? If it is a loss, make it negative and use the minus sign "-". $ Required 3: If Tolkien Company prepares its annual financial statements on March 31st, what is the amount of interest payable to report if the last semi-annual coupon was paid on December 31st? $

Tolkien Company has $15,200 of 10% bond debentures outstanding. The bonds matures June 1, 2025. The company decides to retire the bonds 4 years before their maturity and buys all of them on the open market for 103 on June. The bonds were originally issued at par. Required 1: What is the amount of cash paid by Tolkien Company when retiring the bonds? Do not include interest on last coupon. $ Required 2: What is the gain (loss) on bond retirement to be recognized in the books? If it is a loss, make it negative and use the minus sign "-". $ Required 3: If Tolkien Company prepares its annual financial statements on March 31st, what is the amount of interest payable to report if the last semi-annual coupon was paid on December 31st? $

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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A company has bonds outstanding with a par value of $130,000. The unamortized premium on these bonds is $3,185. If the company retired these bonds at a call price of $128,700, the gain or loss on this retirement is: Multiple Choice O O $1,300 gain. $3,185 loss. $4,485 gain.
The company closes its books on December 31: Lemon Co. sells $1,00,000 of 10% bonds on August 1, 2020. The bonds oay interest on February 1 and August 1. The due date of the bonds is August 1, 2023. The bonds yield 12%. On October 1, 2021, Lemon Co. buys back $200,000 worth of bonds for $218,000 (includes accrued interest). Give entries through February 1, 2022. For the case prepare all of the relevant journal entries from the time of sale until the date indicated. Use the effective-interest method for discount and premium amortization (construct amortization tables where applicable). Amortize premium or discount on interest dates and at year-end. (Assume that no reversing entries were made)
Problem 1: On January 1, 2022, Smith Corp. issued 5-year 12% bonds with face amount of P5,000,000 at a price of P4,497,320 which yields an effective rate of 15%. Interest is payable annually every December 31 starting December 31, 2022. Case 3: The bonds are retired at 92 plus accrued interest on September 30, 2024. 6. How much is the total amount of cash paid to retire the bonds on September 30, 2024? 7. How much is the gain or loss on early retirement of bonds on September 30, 2024? 8. How much is the interest expense for the year 2024?
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Time Value of Money and Early Extinguishment of DebtE13B. Infosphere, Inc., has a $350,000, 4 percent bond issue that was issued a number of years ago at face value. There are now 10 years left on the bond issue, and themarket interest rate is 8 percent. Interest is paid semiannually. The company purchasesthe bonds on the open market at the calculated current market value and retires thebonds.1. Using present value tables, calculate the current market value of the bond issue.2. Is there a gain or loss on retirement of the bonds, and if so, how much is it?
A company has callable bonds outstanding with a par value of $100,000 The unamorticed discount on these bonds is $1,500. The company called to retire these bonde and paid a cal premsum (bonus) of $3,000 What is the gain or loss on this retirement? OA $3.000 koss OB 50 gain or loss OC. $4,500 loss OD. $1,500 gain
Osbourne Oasis, Inc. is running short on cash. Osbourne decides to sell bonds to help with the cash problem. On January 1, 2022 Osbourne sells $1,000,000, 3-year bonds with a coupon rate of 3% payable annually. The market rate of interest was 4%. What would the journal entry be to record the first payment of interest on 12/31/22? STON Dr. Interest Expense $38,890, Cr. Bonds Payable $8,890, Cr. Cash $30,000 Dr. Interest Expense $30000, Dr. Bonds Payable $8,890, Cr. Cash $38,890 Dr. Interest Expense $30,000, Cr. Cash $30,000
Blossom Company has $2080000 of bonds outstanding. The unamortized premium is $30000. If the company redeemed the bonds at 101, what would be the gain or loss on the redemption? $9200 gain $20800 loss $20800 gain $9200 loss
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Part B. - At the beginning of 2016, Comapny A issued a bond as a means of financing a new long-term compensation contract for Professor Q. The 8%, 10 year, $100,000 bonds (with semi-annual interest) were issued to yield 10%. Assume that the bond was issued at 87 (i.e. 87 percent of face value, or $87,000). Since the bond price is given, do NOT compute the bond price.