Hello tutor please find out the correct answer for this accounting question XYZ issues a $1,000,000 bond that matures in 5 years on January 1, 2012. Thebond pays interest annually and has an interest rate of 6% and the marketrate is 4%.1. What is the issuing price of the bond?2. What is the interest expense on December 31, 2012, using the straight-linemethod?3. What is the interest expense on December 31, 2012, using the effective-interest method?4. What is the amortization amount on December 31, 2012, using theeffective-interest method?

Step 1: Define Bond Issue PriceThe issue price of a bond is only the same as its face value when the…

Answered: XYZ issues a $1,000,000 bond that…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...

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XYZ issues a $1,000,000 bond that matures in 5 years on January 1, 2012. The bond pays interest annually and has an interest rate of 6% and the market rate is 4%. 1. What is the issuing price of the bond? 2. What is the interest expense on December 31, 2012, using the straight-line method? 3. What is the interest expense on December 31, 2012, using the effective- interest method? 4. What is the amortization amount on December 31, 2012, using the effective-interest method? The following assets in Jack s business were sold in 2010: Asset Holding Period Gain/(Loss) Office Equipment Automobile 6 years 8 months $1,100 ($800) ABC Stock (capital asset) 2 years $1,400 The office equipment had a zero adjusted basis and was purchased for $8,000. The automobile was purchased for $2,000 and sold for $1,200. The ABC stock was purchased for $1,800 and sold for $3,200. In 2010 (the year of sale), Jack should report what amount of net capital gain and net ordinary income? a. $1,700 LTCG b. $600 LTCG…
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SpaceX issues a bond with a stated interest rate of 9%, face value of $185,000, and due in 6 years. Interest payments are made semi-annually. The market rate for this type of bond is 8%. What is the issue price of the bond? (Round final answer to whole dollars) Use the effective interest rate method Record the bond issue. Record the first interest payment on June 30, 2021. Date Account Name Debit Credit 1/1/21 6/30/23
Temptation Vacations issues $60 million in bonds on January 1, 2021, that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below:Required:1. Were the bonds issued at face amount, a discount, or a premium?2. What is the original issue price of the bonds?3. What is the face amount of the bonds?4. What is the stated annual interest rate?5. What is the market annual interest rate?6. What is the total cash paid for interest assuming the bonds mature in 20 years?

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