X EX 11-3 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. a. Journalize the entries to record the following: Obj. 2 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. Round to the nearest dollar. 3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. Round to the nearest dollar. b. Determine the amount of the bond interest expense for the first year. Explain why the company was able to issue the bonds for only $9,594,415 rather C. than for the face amount of $10,000,000.
X EX 11-3 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. a. Journalize the entries to record the following: Obj. 2 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. Round to the nearest dollar. 3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. Round to the nearest dollar. b. Determine the amount of the bond interest expense for the first year. Explain why the company was able to issue the bonds for only $9,594,415 rather C. than for the face amount of $10,000,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Only EX 11-3 please and thank's!
![570
Chapter 11
Liabilities: Bonds Payable
Exercises
Obj. 1
EX 11-1 Bond price
United States Steel Corporation's (X) 7.5% bonds due in 2022 were reported as selling for 102
Were the bonds selling at a premium or at a discount? Why is United States Steal3.2.
REAL WORLD
to sell its bonds at this price?
Obj. 2
EX 11-2 Entries for issuing bonds
Thomson Co. produces and distributes semiconductors for use by computer manufacture
Thomson issued $800,000 of 10-year, 6% bonds on May 1 of the current year at face value, with
interest payable on May 1 and November 1. The fiscal year of the company is the calendar venn
Journalize the entries to record the following selected transactions for the current year:
SHOW ME HOW
May 1. Issued the bonds for cash at their face amount.
Nov. 1. Paid the interest on the bonds.
Dec. 31. Recorded accrued interest for two months.
XEX 11-3 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.
Obj. 2
V b. $781,118
SHOW ME HOW
a. Journalize the entries to record the following:
1. Issuance of the bonds.
2. First semiannual interest payment. The bond discount is combined with the semiannual
interest payment. Round to the nearest dollar,
3. Second semiannual interest payment. The bond discount is combined with the semiannual
interest payment. Round to the nearest dollar,
b. Determine the amount of the bond interest expense for the first year.
Explain why the company was able to issue the bonds for only $9,594,415 rather
C.
than for the face amount of $10,000,000.
EX 11-4 Entries for issuing bonds and amortizing premium by straight-line method
Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 201,
Smiley issued $20,000,000 of five-year, 9% bonds at a market (effective) interest rate of 8%, receV-
ing cash of $20,811,010. Interest is payable semiannually on Anril 1
the entries to record the following
Obj. 2
SHOW ME HOW](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F68ceea4e-a9a3-41cb-b761-fc3970addf41%2F2fc7ae9e-3dd8-4a28-a33f-7413c68945d0%2Fn7rv04_processed.jpeg&w=3840&q=75)
Transcribed Image Text:570
Chapter 11
Liabilities: Bonds Payable
Exercises
Obj. 1
EX 11-1 Bond price
United States Steel Corporation's (X) 7.5% bonds due in 2022 were reported as selling for 102
Were the bonds selling at a premium or at a discount? Why is United States Steal3.2.
REAL WORLD
to sell its bonds at this price?
Obj. 2
EX 11-2 Entries for issuing bonds
Thomson Co. produces and distributes semiconductors for use by computer manufacture
Thomson issued $800,000 of 10-year, 6% bonds on May 1 of the current year at face value, with
interest payable on May 1 and November 1. The fiscal year of the company is the calendar venn
Journalize the entries to record the following selected transactions for the current year:
SHOW ME HOW
May 1. Issued the bonds for cash at their face amount.
Nov. 1. Paid the interest on the bonds.
Dec. 31. Recorded accrued interest for two months.
XEX 11-3 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.
Obj. 2
V b. $781,118
SHOW ME HOW
a. Journalize the entries to record the following:
1. Issuance of the bonds.
2. First semiannual interest payment. The bond discount is combined with the semiannual
interest payment. Round to the nearest dollar,
3. Second semiannual interest payment. The bond discount is combined with the semiannual
interest payment. Round to the nearest dollar,
b. Determine the amount of the bond interest expense for the first year.
Explain why the company was able to issue the bonds for only $9,594,415 rather
C.
than for the face amount of $10,000,000.
EX 11-4 Entries for issuing bonds and amortizing premium by straight-line method
Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 201,
Smiley issued $20,000,000 of five-year, 9% bonds at a market (effective) interest rate of 8%, receV-
ing cash of $20,811,010. Interest is payable semiannually on Anril 1
the entries to record the following
Obj. 2
SHOW ME HOW
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education