with a face value of P1,000 per bond (total proceeds received from issuance of the bonds are P1,000,000). Interest is payab
Q: Stanford issues bonds dated January 1, 2021, with a par value of $258,000. The bonds' annual…
A: The bonds are issued to raise the money from the market or investors. The bonds are treated as the…
Q: On January 1, 2020, MNOCompany issued its 9%, P2 million bonds, which mature on January 1, 2030. The…
A:
Q: On January 1, 2021, MANGO Corp. issues $100 million of convertible bonds at par value. The bonds…
A: Corporate bonds classified as convertible give their holders the opportunity, at their discretion,…
Q: On January 1,2020, ABC Company issued P 10,000,000 convertible bonds with a stated rate of 12% at…
A: Step 1 is for understanding initial Entries and Understanding the flow if you want Direct Answer…
Q: Tano Company issues bonds with a par value of $94,000 on January 1, 2021. The bonds' annual contract…
A: A bond is a debt security that is always issued by a company, municipality, or government. It is a…
Q: Quatro Company issues bonds dated January 1, 2021, with a par value of $760,000. The bonds' annual…
A: A premium bond is a bond whose current price is more than its face value. It will always have a…
Q: Mango Co. issued bonds payable on January 1, 2022. Each $1,000 bond is convertible to 10 shares of…
A: The objective of the question is to prepare an amortization table for the five-year term of the…
Q: Stanford issues bonds dated January 1, 2019, wi 3%, and interest is paid semiannually on June 30…
A: Bonds are priced by discounting future cash flows. Future cash flows include coupons and par value…
Q: Faith Company issued 5500 convertible bonds on January 1, 2019. The bonds have a three-year term and…
A: As Given in the question Faith Company provided 5,000 convertible notes due on January 1, 2019. The…
Q: Quatro Company issues bonds dated January 1, 2021, with a par value of $900,000. The bonds' annual…
A: The bonds payable are treated as long term liabilities. The bonds are issued to raise money from the…
Q: Quatro Co. issues bonds dated January 1, 2019, with a par value of $720,000. The bonds’ annual…
A: Given that: Par value of bonds = $720,000 Issue price of bonds $757,732
Q: AAA Company issued bonds with face amount of P9,000,000 on January 1, 2020. The nominal rate of 6%…
A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…
Q: On January 01, 2019, IDAMAY KO NA RIN PO SI PAPA CO. issued 10-year bonds with a face amount of P1…
A: Solution Chart Values are based on: n= 10 i= 10% Cash Flow Table Value *…
Q: Claremont Inc. issued a $400,000 bond on January 1, 2020. The bond had a five-year life and an 8%…
A: A bond is an instrument of an indebtedness to the holders of bond issuer in finance. The most…
Q: 1. Calculate the issue price of the corporate bonds of Evermaster on May 1, 2022 2. Prepare a…
A: 20 Corporate Bond Face Value of Each Bond $ 1,00,000 Maturity 5 years Coupon Rate (…
Q: Quatro Company issues bonds dated January 1, 2021, with a par value of $740,000. The bonds' annual…
A: Issue Price$758,222Less: Par Value$740,000Premium ($758,222 - $740,000)$18,222
Q: On September 30, 2021, the San Fillipo Corporation issued 8% stated rate bonds with a face amount of…
A: Calculate the present value of the principal amount as shown below:
Q: On January 1, 2023, SJW Corporation issued a series of 100 convertible bonds, maturing in 5 years.…
A: A journal entry is a formal accounting transaction recorded in the general ledger of a business. It…
Q: n January 1,2020, ABC Company issued P 10,000,000 convertible bonds with a stated rate of 12% at…
A: Bonds can be converted to the number of shares upon the expiration of bond. Or bonds may be retired…
Q: Debussy Ltd issues 3,000 convertible bonds at the start of 2020. The bonds have a four-year term and…
A: Bond is a type of debt which is used to raise the fund for the firm by the large organisation. Bonds…
Q: he Maple Company issued 5-year bonds on January 1, 2020. The debt has a face value of $400,000 and…
A: Price of bond is the sum of present value of future cash flows from the bond. Cash flows include…
Q: Quatro Co. issues bonds dated January 1, 2019, with a par value of $730,000. The bonds’ annual…
A: Formula: Premium on Bonds = Sell price - PAR value Deduction of PAR value from Sell price of bonds…
Q: Quatro Company issues bonds dated January 1, 2021, with a par value of $810,000. The bonds’ annual…
A: The bonds are issued at premium means the cash received form the issue of bonds is more than its…
Q: Quatro Company issues bonds dated January 1, 2021, with a par value of $780,000. The bonds' annual…
A: The bonds are reported as the long-term liabilities in the balance sheet. The bonds are issued to…
Q: Quatro Company issues bonds dated January 1, 2021, with a par value of $700,000. The bonds' annual…
A: The bonds payable are treated as long term liabilities. The bonds are issued to raise money from the…
Q: Brussels Enterprises issues bonds at par dated January 1, 2021, that have a $2,500,000 par value,…
A: Bonds are the securities issued by the entity for the purpose of raising funds from the market.…
Q: Chicken Wings company issued P1 million face value bonds for P1,032,880 on January 2, 2022, a price…
A: Interest expense = issue price of bond ×yield
Q: Quatro Company issues bonds dated January 1, 2021, with a par value of $900,000. The bonds' annual…
A: When a corporation sells bonds to earn cash, bonds payable are recognized. The corporation is a…
Q: Quatro Company issues bonds dated January 1, 2021, with a par value of $400,000. The bonds' annual…
A: The bonds are the financial instruments that are used to raise money from the market or investors.…
Q: Brussels Enterprises issues bonds at par dated January 1, 2021, that have a $2,600,000 par value,…
A: A bond payable is an instrument to raise finance from the market or from existing stockholders in…
Q: Tano Company issues bonds with a par value of $87,000 on January 1, 2021. The bonds' annual contract…
A: Introduction: Bonds are issued to finance ongoing maintenance as well as infrastructure upgrades.…
Q: Quatro Company issues bonds dated January 1, 2021, with a par value of $700,000. The bonds' annual…
A: Issue Price$717,237Less: Par Value$700,000Premium ($717,237 - $700,000)$17,237
Q: On January 1, 2023, DMW Corporation issued a series of 100 convertible bonds, maturing in 5 years.…
A: Note: Since you have posted a question with multiple sub parts, we will provide the solution only to…
Q: Claremont Inc. issued a $400,000 bond on January 1, 2020. The bond had a five-year life and an 8%…
A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: On January 1, 2021, a firm issues bonds with a face amount of $1,500,000. The stated rate is 10%,…
A: Issuing bonds is one way for companies to raise money. A bond functions as a loan between an…
Q: Requirements 3 a. Determine the issue price of the debt. b. Prepare the amortization table for the…
A: Par Value of bonds issued $750,000Coupon rate p.a.5.00%Effective interest rate p.a.6.00%Period of…
Q: On June 1, 2023, Numbers Company issued a 3-year, P5,000,000 face value bonds with a stated rate of…
A: The present value of the bond issued by Numbers Company on June 1, 2023 is 4,759,815.00.…
Q: bonds were issued, the prevailing market interest rate for similar debt without the conversion…
A: Financial statements refer to the final documents prepared at the end of the year by the business…
Q: s convertible into 35 common shares, which are currently trading at $34 per share. Similar bonds…
A: Bonds - Bonds are fixed-income securities that reflect loans from investors to borrowers (typically…
Q: TDC Company issued a 3-year,12%, 2,000 of P 1,000 face value bonds with warrants at 98 on January 1,…
A: solution : given face value of bond =2000 *1000…
Q: On January 1, 2020, Sandhill Corporation issued a series of 500 convertible bonds, maturing in five…
A: IFRS 9 "Financial instruments" deals with accounting and measurement of a financial asset or a…
Q: Quatro Company issues bonds dated January 1, 2021, with a par value of $760,000. The bonds' annual…
A: The bonds payable are reported as the long-term liabilities. The bonds are issued at a premium when…
Q: Quatro Company issues bonds dated January 1, 2021, with a par value of $880,000. The bonds' annual…
A: Bonds payable are the long-term liabilities issued to avail the long-term funds for the business.…
Q: ABC Company issued a 3-year,12%, 2,000 of P 1,000 face value bonds with warrants at 98 on January 1,…
A: Present value of the bonds = Present value of principal + Present value of interest payments = face…
Q: On January 1, 2023, BDM Corporation issued a series of 100 convertible bonds, maturing in 5 years.…
A: Bonds with a conversion feature combine elements of both debt and equity financing. These bonds give…
Q: ABC Co. issued 1.000 convertible bonds at the beginning of 2019. The bonds have a four-year term…
A: Share Capital-Ordinary will be credited by Rp250,000, as there is an increase in share capital worth…
Q: please step by step solution.
A: Step 1: Required 1: Premium = Issue price - Par value = $767,042 - $730,000 = $37,042 Premium is…
Mae Jong Corporation issues 1,000 convertible bonds at the beginning of 2021. The bonds have a four-year term with a stated rate of interest of 6 percent, and are issued at par with a face value of P1,000 per bond (total proceeds received from issuance of the bonds are P1,000,000). Interest is payable annually at December 31. Each bond is convertible into 250 ordinary shares with a par value of P1. The market rate of interest on similar non-convertible debt is 9 percent. Compute the liability component of Mae Jong’s convertible debt.
|
|
PV of 1 for 4 periods |
PV of Ordinary Annuity for 4 periods |
|
6% |
0.79209 |
3.46611 |
|
9% |
0.70843 |
3.23972 |
The issuance of convertible bonds increased the entity’s equity by:
Step by step
Solved in 2 steps
- On January 1, 2020, XYZ Co. issued a bond with a $400,000 par (face) value. The bond is a 5-year bond and will mature on December 31, 2025. The bond has a contract rate of interest of 5% and interest is paid semi-annually on June 30 and December 31 of each year. On January 1, 2020, the market rate of interest for bonds was 6%. The issue price of the bond was $382,942. The journal entry to record issuance of the bond would be: Debit Credit Cash $382,942 Discount on B/P 17,058 Bonds Payable $400,000 prepare the journal entry to record the first interest payment on XYZ Co.'s bond on June 30, 2020 using the straight-line method. (Show your work in each step using the recommended approach.)On January 1,2020, ABC Company issued P 10,000,000 convertible bonds with a stated rate of 12% at 110. The principal of the bonds is payable on December 31, 2024. Interest on the bonds is payable annually starting December 31,2020. Each P 5,000 bond is convertible into 20 ordinary shares of P 50 par. Without the bond conversion privilege, the bonds would have sold to yield 10%.On December 31,2021 after paying periodic interests, half of the bonds issued were converted to ordinary shares. On October 1,2023, half of the remaining bonds were retired at 102 plus accrued interest. Without the bond conversion privilege, the bonds are quoted at 101.How much was credited to the share premium- ordinary account at the time of conversion of bonds on December 31,2021? (For present value factors, do not round off) P 1,000,000 P 4,369,606.52 P 4,639,606.52 P 5,248,685.20On January 1,2020, ABC Company issued P 10,000,000 convertible bonds with a stated rate of 12% at 110. The principal of the bonds is payable on December 31, 2024. Interest on the bonds is payable annually starting December 31,2020. Each P 5,000 bond is convertible into 20 ordinary shares of P 50 par. Without the bond conversion privilege, the bonds would have sold to yield 10%.On December 31,2021 after paying periodic interests, half of the bonds issued were converted to ordinary shares. On October 1,2023, half of the remaining bonds were retired at 102 plus accrued interest. Without the bond conversion privilege, the bonds are quoted at 101.How much is the gain or loss on retirement of bonds on October 1,2023?
- Stanford issues bonds dated January 1, 2021, with a par value of $247,000. The bonds' annual contract rate is 6%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 8%, and the bonds are sold for $234,048. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over the life of these bonds? 3. Prepare an effective interest amortization table for these bonds. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare an effective interest amortization table for these bonds. Note: Round all amounts to the nearest whole dollar. Semiannual Interest Period-End 01/01/2021 06/30/2021 12/31/2021 06/30/2022 12/31/2022 06/30/2023 12/31/2023 Total Cash Interest Bond Interest Paid Expense Discount Amortization < Required 2 Unamortized Discount Carrying Value Required 3On April 1, 2020, Dalton Ltd. issued a convertible $3,000,000, 25-year, 6% bond at 99. The bond is convertible at a rate of 10 common shares for each $1,000. Similar bonds trading on the market without this option carry an interest rate of 7%. Interest on the bond is paid semi-annually on April and October 1st each year, beginning in October 1, 2020. Dalton uses the effective interest method of amortizing discounts or premiums. REQUIRED: Prepare the journal entry to record the bond issuance using the residual value (incremental) method. Show all calculations. Prepare the journal entry for the first interest payment on October 1, 2020. Prepare the entry on Dalton’s books assuming that 60% of the bonds were converted immediately after the October 1, 2021 interest payment. Prepare the adjusting entry for the interest accrual on December 31, 2021. Prepare the journal entry for the interest payment on April 1, 2022 Prepare the entry on Dalton’s books on the maturity date of the bond.On July 1, 2021, GIl Inc. received 103,288 for each 100,000 face value bonds, 12% bonds, a price that yields 10%. What is the amount of interest payable for ten pieces of this bond as of December 31, 2021?
- On January 1, 2022, Fancy Co issued $100,000 in 10 year bonds. The bonds have a stated rate of 5% but are issued at a discount as the market rate is 7%. Because the market rate is higher, Fancy receives the present value which is $92,640. The coupon is paid annually on December 31st of each year. Provide the journal entries for Jan 1, 2022, and Dec 31st, 2022.On January 1,2020, ABC Company issued P 10,000,000 convertible bonds with a stated rate of 12% at 110. The principal of the bonds is payable on December 31, 2024. Interest on the bonds is payable annually starting December 31,2020. Each P 5,000 bond is convertible into 20 ordinary shares of P 50 par. Without the bond conversion privilege, the bonds would have sold to yield 10%.On December 31,2021 after paying periodic interests, half of the bonds issued were converted to ordinary shares. On October 1,2023, half of the remaining bonds were retired at 102 plus accrued interest. Without the bond conversion privilege, the bonds are quoted at 101.How much was credited to the share premium- ordinary account at the time of conversion of bonds on December 31,2021?On April 1, 20x9, Mountain Corp. issued 200 of its ₱1,000 face value bonds at 101 plus accrued interest. The bonds were dated November 1, 20x8, and bear interest at an annual rate of 9% payable semiannually on November 1 and May 1. What amount did Mountain receive from the bond issuance?
- Mango Co. issued bonds payable on January 1, 2022. Each $1,000 bond is convertible to 10 shares of common stock after January 1, 2024. The bonds have a 5-year term, a stated rate of 8%, and pay interest annually on January 1. The bonds were issued at a premium of $25,274 which provides an effective interest rate of 6%. (Hint: Prepare an amortization table for the five-year term of the bonds. Note that 2023 is the second year in the term of the bonds.) Prepare the adjusting entry at Dec. 31 , 2023.On March 1, 2024, Baddour, Incorporated, issued 10% bonds, dated January 1, with a face amount of $160 million. The bonds were priced at $142.00 million (plus accrued interest) to yield 12%. The price if issued on January 1 would have been $139.25 million. Interest is paid semiannually on June 30 and December 31. Baddour’s fiscal year ends September 30. Required: 1. to 3. What would be the amount(s) related to the bonds Baddour would report in its balance sheet, income statement and statement of cash flows for the year ended September 30, 2024?Stanford issues bonds dated January 1, 2021, with a par value of $244,000. The bonds' annual contract rate is 10%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 12%, and the bonds are sold for $232,011. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over the life of these bonds? 3. Prepare an effective interest amortization table for these bonds. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare an effective interest amortization table for these bonds. Note: Round all amounts to the nearest whole dollar. Semiannual Interest Period-End 01/01/2021 06/30/2021 12/31/2021 06/30/2022 12/31/2022 06/30/2023 12/31/2023 Total Cash Interest Bond Interest Paid Expense Discount Amortization Unamortized Discount Carrying Value
