Connect Access Card for Financial Accounting
9th Edition
ISBN: 9781259738678
Author: Robert Libby, Patricia Libby, Frank Hodge Ch
Publisher: McGraw-Hill Education
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Chapter 10, Problem 10.17E
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Several years ago, Cyclop Company issued bonds with a face value of $1,000,000 for $1,045,000. As
a result of declining interest rates, the company has decided to call the bonds at a call premium of 5
percent over par. The bonds have a current book value of $1,010,000. Record the retirement of the
bonds, using a premium account.
Several years ago, Cyclop Company issued bonds with a face value of $1,000,000 for $1,145,000. As a result of declining interest rates,
the company has decided to call the bonds at a call premium of 5 percent over par. The bonds have a current book value of
$1,039,000.
Required:
Record the retirement of the bonds, using a premium account.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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Chapter 10 Solutions
Connect Access Card for Financial Accounting
Ch. 10 - From the perspective of the issuer, what are some...Ch. 10 - What are the primary characteristics of a bond?...Ch. 10 - Prob. 3QCh. 10 - Differentiate between a bond indenture and a bond...Ch. 10 - Prob. 5QCh. 10 - Prob. 6QCh. 10 - Prob. 7QCh. 10 - Prob. 8QCh. 10 - What is the book value of a bond?Ch. 10 - Prob. 10Q
Ch. 10 - Prob. 11QCh. 10 - Prob. 12QCh. 10 - Prob. 1MCQCh. 10 - Prob. 2MCQCh. 10 - Prob. 3MCQCh. 10 - Prob. 4MCQCh. 10 - Prob. 5MCQCh. 10 - Prob. 6MCQCh. 10 - Prob. 7MCQCh. 10 - Prob. 8MCQCh. 10 - Prob. 9MCQCh. 10 - Prob. 10MCQCh. 10 - Prob. 10.1MECh. 10 - Computing the Price of a Bond Issued at Par LO10-2...Ch. 10 - Understanding Financial Ratios 0-3, 10-6 The...Ch. 10 - Computing the Times Interest Earned Ratio LO10-3...Ch. 10 - Computing the Price of a Bond Issued at a Discount...Ch. 10 - Recording the Issuance and Interest Payments of a...Ch. 10 - Prob. 10.7MECh. 10 - Prob. 10.8MECh. 10 - Prob. 10.9MECh. 10 - Prob. 10.10MECh. 10 - Prob. 10.11MECh. 10 - Prob. 10.12MECh. 10 - Prob. 10.13MECh. 10 - Prob. 10.14MECh. 10 - Prob. 10.1ECh. 10 - Prob. 10.2ECh. 10 - Prob. 10.3ECh. 10 - Computing Issue Prices of Bonds Sold at Par, at a...Ch. 10 - Prob. 10.5ECh. 10 - Prob. 10.6ECh. 10 - Prob. 10.7ECh. 10 - Prob. 10.8ECh. 10 - (Chapter Supplement) Recording and Reporting a...Ch. 10 - Prob. 10.10ECh. 10 - Prob. 10.11ECh. 10 - Explaining Why Debt Is Issued at a Price Other...Ch. 10 - Prob. 10.13ECh. 10 - Prob. 10.14ECh. 10 - Prob. 10.15ECh. 10 - Prob. 10.16ECh. 10 - Prob. 10.17ECh. 10 - Prob. 10.18ECh. 10 - Prob. 10.19ECh. 10 - Prob. 10.20ECh. 10 - Prob. 10.21ECh. 10 - Prob. 10.22ECh. 10 - Prob. 10.23ECh. 10 - Prob. 10.24ECh. 10 - Prob. 10.1PCh. 10 - Prob. 10.2PCh. 10 - Comparing Bonds Issued at Par, at a Discount, and...Ch. 10 - Prob. 10.4PCh. 10 - Prob. 10.5PCh. 10 - Recording and Reporting Bonds Issued at a Discount...Ch. 10 - Recording and Reporting a Bond Issued at a...Ch. 10 - Prob. 10.8PCh. 10 - Prob. 10.9PCh. 10 - Prob. 10.10PCh. 10 - Prob. 10.11PCh. 10 - Prob. 10.12PCh. 10 - Prob. 10.13PCh. 10 - Prob. 10.14PCh. 10 - Prob. 10.15PCh. 10 - Prob. 10.16PCh. 10 - Prob. 10.1APCh. 10 - Prob. 10.2APCh. 10 - Prob. 10.3APCh. 10 - Prob. 10.4APCh. 10 - Prob. 10.5APCh. 10 - Prob. 10.6APCh. 10 - Recording and Reporting a Bond Issued at a Premium...Ch. 10 - Prob. 10.8APCh. 10 - Prob. 10.1CONCh. 10 - Prob. 10.1CPCh. 10 - Prob. 10.2CPCh. 10 - Prob. 10.3CPCh. 10 - Prob. 10.4CPCh. 10 - Prob. 10.5CPCh. 10 - Evaluating an Ethical Dilemma LO 10-1 Assume that...
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- Several years ago, Cyclop Company issued bonds with a face value of $1,000,000 for $1,145,000. As a result of declining interest rates, the company has decided to call the bonds at a call premium of 5 percent over par. The bonds have a current book value of $1,039,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Required: Record the retirement of the bonds, using a premium account.arrow_forwardUramilabenarrow_forwardSeveral years ago, Cyclop Company issued bonds with a face value of $1,000,000 for $1,070,000. As a result of declining interest rates, the company has decided to call the bonds at a call premium of 5 percent over par. The bonds have a current book value of $1,035,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) I'm unsure how to calculate loss on bond call. Thanks. Required: Record the retirement of the bonds, using a premium account.arrow_forward
- Blossom Company issued $510,000 of 5-year, 9% bonds at 96 on January 1, 2022. The bonds pay interest annually. (a1) Your answer is correct. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Cash (a2) Discount on Bonds Payable Bonds Payable * Your answer is incorrect. Compute the total cost of borrowing for these bonds. Total cost of borrowing 177310 Debit 489600 20400 Credit 510000arrow_forwardCan you help me with this?arrow_forwardFlint Company had bonds outstanding with a maturity value of $272,000. On April 30, 2025, when these bonds had an unamortized discount of $10,000, they were called in at 105. To pay for these bonds, Flint had issued other bonds a month earlier bearing a lower interest rate. The newly issued bonds had a life of 10 years. The new bonds were issued at 103 (face value $272,000). Ignoring interest, compute the gain or loss. Loss ✓on redemption $ Ignoring interest, prepare the two entries to record this refunding transaction. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation Bonds Payable Loss on Redemption of Bonds Discount on Bonds Payable Cash (To record redemption of bonds payable) Cash Premium on Bonds Payable 23600 Bonds Payable Debit 272000 23600 Credit 10000…arrow_forward
- On January 2, Year 1, Kampai Sushi Bar sold $800,000 of bonds for $785,000. The bonds will mature in 10 years and pay interest annually on December 31. The company properly recorded the payment of interest and the amortization of the discount using the effective interest method. What will be the carrying value of the bonds at the end of Year 1? a.$800,000 b.less than $785,000 c.$785,000 d.greater than $785,000, but less than $800,000arrow_forwardBlossom Company issued $510,000 of 5-year, 9% bonds at 96 on January 1, 2022. The bonds pay interest annually. (a1) Your answer is correct. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Cash Discount on Bonds Payable Bonds Payable Your answer is incorrect. Compute the total cost of borrowing for these bonds. Total cost of borrowing eTextbook and Media List of Accounts - Your answer is partially correct. Account Titles and Explanation Interest Expense (DZ). Premium on Bonds Payable $ Interest Payable Prepare the journal entry to record the issuance of the bonds, assuming the bonds were issued at 104. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Total cost of borrowing Debit eTextbook and Media $ 489600 Debit 20400 Compute the total cost of borrowing for these bonds, assuming the bonds were…arrow_forwardNote:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
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