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Business Accounting Financial Accounting: Information for Decisions

1) Bonds: It is one of the important sources which are used by the company or entities for raising long term funds. Bonds are the liability of the company. Company pay interest on the amount of bonds. Various types of bonds are municipal bonds, corporate bonds, zero coupon bonds To Prepare: Amortisation Table Year Cash paid Interest paid Amortised discount Unamortised discount Carrying value 01-01-2018 4048 95952 30-06-2018 3500 4006 506 3542 96458 31-12-2018 3500 4006 506 3036 96964 30-06-2019 3500 4006 506 2530 97470 31-12-2019 3500 4006 506 2040 97976 30-06-2020 3500 4006 506 1518 98482 31-12-2020 3500 4006 506 1012 98988 30-06-2021 3500 4006 506 506 99494 31-12-2021 3500 4006 506 0 100000 Computation of Unamortised discount on 1/1/ 2018 Particulars Amount $ Face value of bond (A) 100000 Bonds issued price (B) 95952 Unamortized discount (A)-(B) 4048 Calculation of semi-annually amortisation amount: Semi Annually Amortisation = Face value of bond - Issue price No .of years = $ 100000 − $ 95952 8 = $ 506 2) Bonds: It is one of the important sources which are used by the company or entities for raising long term funds. Bonds are the liability of the company. Company pays interest on the value of bonds. Various types of bonds are municipal bonds, corporate bonds, zero coupon bonds To explain: Journal entry of first two interest payment. Date Account title and explanation Debit $ Credit $ 30/6/2018 Interest expense 4006 Discount on bonds payable 506 Cash (100000 x7% x 6/12) 3500 (To record interest expense) 31/12/2018 Interest expense 4006 Discount on bonds payable 506 Cash (100000 x 7% x 6/12) 3500 (To record interest expense) Amount of Cash is calculated as : 100000×7%× 6 12 =$3500 3) Bonds: It is one of the important sources which are used by the company or entities for raising long term funds. Bonds are the liability of the company. Company pays interest on the value of bonds. Various types of bonds are municipal bonds, corporate bonds, zero coupon bonds To Prepare: Journal entry at the time of maturity of bond on 31/12/2021 Date Account title and explanation Debit $ Credit $ 31/12/2021 Bonds payable 100000 cash 100000 (To record maturity of bond)

1) Bonds: It is one of the important sources which are used by the company or entities for raising long term funds. Bonds are the liability of the company. Company pay interest on the amount of bonds. Various types of bonds are municipal bonds, corporate bonds, zero coupon bonds To Prepare: Amortisation Table Year Cash paid Interest paid Amortised discount Unamortised discount Carrying value 01-01-2018 4048 95952 30-06-2018 3500 4006 506 3542 96458 31-12-2018 3500 4006 506 3036 96964 30-06-2019 3500 4006 506 2530 97470 31-12-2019 3500 4006 506 2040 97976 30-06-2020 3500 4006 506 1518 98482 31-12-2020 3500 4006 506 1012 98988 30-06-2021 3500 4006 506 506 99494 31-12-2021 3500 4006 506 0 100000 Computation of Unamortised discount on 1/1/ 2018 Particulars Amount $ Face value of bond (A) 100000 Bonds issued price (B) 95952 Unamortized discount (A)-(B) 4048 Calculation of semi-annually amortisation amount: Semi Annually Amortisation = Face value of bond - Issue price No .of years = $ 100000 − $ 95952 8 = $ 506 2) Bonds: It is one of the important sources which are used by the company or entities for raising long term funds. Bonds are the liability of the company. Company pays interest on the value of bonds. Various types of bonds are municipal bonds, corporate bonds, zero coupon bonds To explain: Journal entry of first two interest payment. Date Account title and explanation Debit $ Credit $ 30/6/2018 Interest expense 4006 Discount on bonds payable 506 Cash (100000 x7% x 6/12) 3500 (To record interest expense) 31/12/2018 Interest expense 4006 Discount on bonds payable 506 Cash (100000 x 7% x 6/12) 3500 (To record interest expense) Amount of Cash is calculated as : 100000×7%× 6 12 =$3500 3) Bonds: It is one of the important sources which are used by the company or entities for raising long term funds. Bonds are the liability of the company. Company pays interest on the value of bonds. Various types of bonds are municipal bonds, corporate bonds, zero coupon bonds To Prepare: Journal entry at the time of maturity of bond on 31/12/2021 Date Account title and explanation Debit $ Credit $ 31/12/2021 Bonds payable 100000 cash 100000 (To record maturity of bond)

Solution Summary: The author explains that bonds are one of the important sources used by the company or entities for raising long term funds.

Financial Accounting: Information for Decisions

Financial Accounting: Information for Decisions

9th Edition

ISBN: 9781260158809

Author: Wild, John

Publisher: MCGRAW-HILL HIGHER EDUCATION

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Chapter 10, Problem 14E

Chapter 10, Problem 16E

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Chapter 10 Solutions

Financial Accounting: Information for Decisions

Ch. 10 - What is the main difference between notes payable...Ch. 10 - Prob. 2DQ Ch. 10 - Prob. 3DQ Ch. 10 - Prob. 4DQ Ch. 10 - Prob. 5DQ Ch. 10 - Prob. 6DQ Ch. 10 - Prob. 7DQ Ch. 10 - Prob. 8DQ Ch. 10 - Prob. 9DQ Ch. 10 - Prob. 10DQ

Ch. 10 - Prob. 11DQ Ch. 10 - Prob. 12DQ Ch. 10 - Prob. 13DQ Ch. 10 - Prob. 14DQ Ch. 10 - Prob. 15DQ Ch. 10 - Prob. 16DQ Ch. 10 - Prob. 17DQ Ch. 10 - Prob. 18DQ Ch. 10 - Prob. 19DQ Ch. 10 - Prob. 1QS Ch. 10 - Prob. 2QS Ch. 10 - Prob. 3QS Ch. 10 - Prob. 4QS Ch. 10 - Prob. 5QS Ch. 10 - Prob. 6QS Ch. 10 - Prob. 7QS Ch. 10 - Prob. 8QS Ch. 10 - Prob. 9QS Ch. 10 - Prob. 10QS Ch. 10 - Prob. 11QS Ch. 10 - Prob. 12QS Ch. 10 - Prob. 13QS Ch. 10 - Prob. 14QS Ch. 10 - Prob. 15QS Ch. 10 - Prob. 16QS Ch. 10 - Jin Li, an employee of ETrain.com, leases a car at...Ch. 10 - Prob. 18QS Ch. 10 - Prob. 19QS Ch. 10 - Prob. 21QS Ch. 10 - Prob. 1E Ch. 10 - Prob. 2E Ch. 10 - Bringham Company issues bonds with a par value...Ch. 10 - Prob. 4E Ch. 10 - Prob. 5E Ch. 10 - Prob. 6E Ch. 10 - Prob. 7E Ch. 10 - Prob. 8E Ch. 10 - Prob. 9E Ch. 10 - Prob. 10E Ch. 10 - Prob. 11E Ch. 10 - Prob. 12E Ch. 10 - Prob. 13E Ch. 10 - Prob. 14E Ch. 10 - Prob. 15E Ch. 10 - Prob. 16E Ch. 10 - Prob. 17E Ch. 10 - Prob. 18E Ch. 10 - Prob. 19E Ch. 10 - Heineken N.V. reports the following information...Ch. 10 - Prob. 21E Ch. 10 - Prob. 2PSA Ch. 10 - Refer to the bond details in Problem 10-2A,...Ch. 10 - Prob. 7PSA Ch. 10 - Prob. 8PSA Ch. 10 - Prob. 9PSA Ch. 10 - Prob. 10PSA Ch. 10 - Prob. 11PSA Ch. 10 - Prob. 12PSA Ch. 10 - Prob. 2PSB Ch. 10 - Prob. 3PSB Ch. 10 - Prob. 6PSB Ch. 10 - Prob. 7PSB Ch. 10 - Prob. 8PSB Ch. 10 - Prob. 9PSB Ch. 10 - Prob. 10PSB Ch. 10 - Prob. 11PSB Ch. 10 - Refer to the lease details in Problem 10-11B....Ch. 10 - Prob. 10SP Ch. 10 - Prob. 1FSA Ch. 10 - Prob. 2FSA Ch. 10 - FSA 10-3 Selected results from Samsung, Apple, and...Ch. 10 - Prob. 1BTN Ch. 10 - Prob. 2BTN Ch. 10 - Prob. 5BTN

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