Bonds Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond. Straight line amortization bond Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment. To prepare: The journal entry to record issue of bonds for Company S on January 1, 2017.

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Answer 1

Question

Chapter 10, Problem 10.20E

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Straight line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

To prepare: The journal entry to record issue of bonds for Company S on January 1, 2017.

(b)

To determine

To prepare: The adjustment entry to record accrual of interest and bonds premium amortization for Company S on December 31, 2017.

(c)

To determine

To prepare: The journal entry to record the payment of accrued interest for Company S on January 1, 2018.

(d)

To determine

To prepare: The journal entry to record redemption of bonds at the time of maturity for the Company S on January 1, 2047.

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Answer 2

Question

Chapter 10, Problem 10.20E

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Straight line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

To prepare: The journal entry to record issue of bonds for Company S on January 1, 2017.

(b)

To determine

To prepare: The adjustment entry to record accrual of interest and bonds premium amortization for Company S on December 31, 2017.

(c)

To determine

To prepare: The journal entry to record the payment of accrued interest for Company S on January 1, 2018.

(d)

To determine

To prepare: The journal entry to record redemption of bonds at the time of maturity for the Company S on January 1, 2047.

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Answer 3

Question

Chapter 10, Problem 10.20E

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Straight line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

To prepare: The journal entry to record issue of bonds for Company S on January 1, 2017.

(b)

To determine

To prepare: The adjustment entry to record accrual of interest and bonds premium amortization for Company S on December 31, 2017.

(c)

To determine

To prepare: The journal entry to record the payment of accrued interest for Company S on January 1, 2018.

(d)

To determine

To prepare: The journal entry to record redemption of bonds at the time of maturity for the Company S on January 1, 2047.

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Answer 4

Question

Chapter 10, Problem 10.20E

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Straight line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

To prepare: The journal entry to record issue of bonds for Company S on January 1, 2017.

(b)

To determine

To prepare: The adjustment entry to record accrual of interest and bonds premium amortization for Company S on December 31, 2017.

(c)

To determine

To prepare: The journal entry to record the payment of accrued interest for Company S on January 1, 2018.

(d)

To determine

To prepare: The journal entry to record redemption of bonds at the time of maturity for the Company S on January 1, 2047.

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Answer 5

Chapter 10, Problem 10.20E

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Straight line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

To prepare: The journal entry to record issue of bonds for Company S on January 1, 2017.

(b)

To determine

To prepare: The adjustment entry to record accrual of interest and bonds premium amortization for Company S on December 31, 2017.

(c)

To determine

To prepare: The journal entry to record the payment of accrued interest for Company S on January 1, 2018.

(d)

To determine

To prepare: The journal entry to record redemption of bonds at the time of maturity for the Company S on January 1, 2047.

Answer 6

Chapter 10, Problem 10.20E

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Straight line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

To prepare: The journal entry to record issue of bonds for Company S on January 1, 2017.

Answer 7

Chapter 10, Problem 10.20E

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Straight line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

To prepare: The journal entry to record issue of bonds for Company S on January 1, 2017.

Answer 8

(b)

To determine

To prepare: The adjustment entry to record accrual of interest and bonds premium amortization for Company S on December 31, 2017.

Answer 9

(b)

To determine

To prepare: The adjustment entry to record accrual of interest and bonds premium amortization for Company S on December 31, 2017.

Answer 10

(c)

To determine

To prepare: The journal entry to record the payment of accrued interest for Company S on January 1, 2018.

Answer 11

(c)

To determine

To prepare: The journal entry to record the payment of accrued interest for Company S on January 1, 2018.

Answer 12

(d)

To determine

To prepare: The journal entry to record redemption of bonds at the time of maturity for the Company S on January 1, 2047.

Answer 13

(d)

To determine

To prepare: The journal entry to record redemption of bonds at the time of maturity for the Company S on January 1, 2047.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 10 - Prob. 1Q Ch. 10 - Prob. 2Q Ch. 10 - Prob. 3Q Ch. 10 - Prob. 4Q Ch. 10 - Prob. 5Q Ch. 10 - (a) Identify three taxes commonly paid by...Ch. 10 - Prob. 7Q Ch. 10 - Prob. 8Q Ch. 10 - Contrast these types of bonds: (a) Secured and...Ch. 10 - Prob. 10Q

Solution Summary: The author explains that bonds are a kind of interest bearing notes payable, usually issued by companies, universities, and governmental organizations.

To prepare: The adjustment entry to record accrual of interest and bonds premium amortization for Company S on December 31, 2017.

To prepare: The journal entry to record the payment of accrued interest for Company S on January 1, 2018.

To prepare: The journal entry to record redemption of bonds at the time of maturity for the Company S on January 1, 2047.

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Chapter 10 Solutions