1819PROBLEM TWo20Your company issued the following bond:21Face amount500,00022Maturity in years1023Interest rate payable on January 1 every year5%24Market interest rate at issuance5%2526The bonds were issued on June 1, 20X12728REQUIRED:Prepare the journal entry to issue the bondson June 1, 20X1.а.29Prepare the journal entry to record any end-b.30of-year required entries.Prepare the journal entry to record the firstC.interest payment on January 1, 20X2.3132333435363738 Bond Homework ProblemsDo all work in Excel and use formulaswherever possible. Submit the HW in2eRacer.34PROBLEM ONEOn January 1, 20X1, your company issuedthe following bonds:5Face amount2,000,0007Maturity in years158Interest rate5%9Interest paid on January 1 each year10Costs incurred to issue the bonds45,00011Market interest rate on issue date4%1213REQUIRED:Prepare the journal entry to issue the bondson January 1, 20X1.а.14Prepare the journal entry to pay the annualb.interest payment on January 1, 20X2 as wellas any end-of-year required entries for 20X1.The bonds are called in at a price of 101 onJanuary 2, 20X7. Prepare the journal entry torecord this.15С.16Now assume the market interest rate on thed.issue date is 6%. Prepare the journal entries17in a, b, and c above using this rate.18LO

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Your company issued the following bond: Face amount 500,000 Maturity in years 10 Interest rate payable on January 1 every year 5% Market interest rate at issuance 5% The bonds were issued on June 1, 20X1 REQUIRED: Prepare the journal entry to issue the bonds а. on June 1, 20X1. Prepare the journal entry to record any end- b. of-year required entries. Prepare the journal entry to record the first с. interest payment on January 1, 20X2.

Your company issued the following bond: Face amount 500,000 Maturity in years 10 Interest rate payable on January 1 every year 5% Market interest rate at issuance 5% The bonds were issued on June 1, 20X1 REQUIRED: Prepare the journal entry to issue the bonds а. on June 1, 20X1. Prepare the journal entry to record any end- b. of-year required entries. Prepare the journal entry to record the first с. interest payment on January 1, 20X2.

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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