Bond issuance refers to the process of raising ,oney from investors by issuing them bonds. Bonds are assumed debt on the company as there raise the liability of the company. To determine: At what amount bond was sold at discount

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Answer 1

Question

Chapter 10, Problem 5E

Summary Introduction

Introduction: Bond issuance refers to the process of raising ,oney from investors by issuing them bonds. Bonds are assumed debt on the company as there raise the liability of the company.

To determine: At what amount bond was sold at discount

Expert Solution & Answer

Answer to Problem 5E

Bond sold at discount is $ 12,000

Explanation of Solution

(a)

DATE	PARTICULARS	AMOUNT DR	AMOUNT CR
31/12/2016	Cash	188,000
	Discount on bonds payable	12,000
	Bonds payable		2,00,000
	(Being bond sold at discount)

(b)

DATE	PARTICULARS	AMOUNT DR	AMOUNT CR
30/06/2017	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

31/12/2017	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

30/06/2018	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

31/12/2018	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

Working note:

Total Interest= Face value× Rate× No. of years = $ 200,000× 5%2×4
=$20,000
Interest for each semiannual period=Total interest amountNo. of semiannual periods
=$20,0004=$5,000
Discount to be amortized=Total unamortized discountNo. of semiannual periods
=$12,0004=$3,000
Total bond interest expenses= Interest expenses+ Discount amount = $5,000+$3,000 = $8,000

(c)

DATE	PARTICULARS	AMOUNT DR	AMOUNT CR
31/12/2018	Bonds payable	2,00,000
	Cash		2,00,000
	(Being payment made to bondholders at maturity)

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Answer 2

Question

Chapter 10, Problem 5E

Summary Introduction

Introduction: Bond issuance refers to the process of raising ,oney from investors by issuing them bonds. Bonds are assumed debt on the company as there raise the liability of the company.

To determine: At what amount bond was sold at discount

Expert Solution & Answer

Answer to Problem 5E

Bond sold at discount is $ 12,000

Explanation of Solution

(a)

DATE	PARTICULARS	AMOUNT DR	AMOUNT CR
31/12/2016	Cash	188,000
	Discount on bonds payable	12,000
	Bonds payable		2,00,000
	(Being bond sold at discount)

(b)

DATE	PARTICULARS	AMOUNT DR	AMOUNT CR
30/06/2017	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

31/12/2017	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

30/06/2018	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

31/12/2018	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

Working note:

Total Interest= Face value× Rate× No. of years = $ 200,000× 5%2×4
=$20,000
Interest for each semiannual period=Total interest amountNo. of semiannual periods
=$20,0004=$5,000
Discount to be amortized=Total unamortized discountNo. of semiannual periods
=$12,0004=$3,000
Total bond interest expenses= Interest expenses+ Discount amount = $5,000+$3,000 = $8,000

(c)

DATE	PARTICULARS	AMOUNT DR	AMOUNT CR
31/12/2018	Bonds payable	2,00,000
	Cash		2,00,000
	(Being payment made to bondholders at maturity)

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Answer 3

Question

Chapter 10, Problem 5E

Summary Introduction

Introduction: Bond issuance refers to the process of raising ,oney from investors by issuing them bonds. Bonds are assumed debt on the company as there raise the liability of the company.

To determine: At what amount bond was sold at discount

Expert Solution & Answer

Answer to Problem 5E

Bond sold at discount is $ 12,000

Explanation of Solution

(a)

DATE	PARTICULARS	AMOUNT DR	AMOUNT CR
31/12/2016	Cash	188,000
	Discount on bonds payable	12,000
	Bonds payable		2,00,000
	(Being bond sold at discount)

(b)

DATE	PARTICULARS	AMOUNT DR	AMOUNT CR
30/06/2017	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

31/12/2017	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

30/06/2018	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

31/12/2018	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

Working note:

Total Interest= Face value× Rate× No. of years = $ 200,000× 5%2×4
=$20,000
Interest for each semiannual period=Total interest amountNo. of semiannual periods
=$20,0004=$5,000
Discount to be amortized=Total unamortized discountNo. of semiannual periods
=$12,0004=$3,000
Total bond interest expenses= Interest expenses+ Discount amount = $5,000+$3,000 = $8,000

(c)

DATE	PARTICULARS	AMOUNT DR	AMOUNT CR
31/12/2018	Bonds payable	2,00,000
	Cash		2,00,000
	(Being payment made to bondholders at maturity)

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Answer 4

Question

Chapter 10, Problem 5E

Summary Introduction

Introduction: Bond issuance refers to the process of raising ,oney from investors by issuing them bonds. Bonds are assumed debt on the company as there raise the liability of the company.

To determine: At what amount bond was sold at discount

Expert Solution & Answer

Answer to Problem 5E

Bond sold at discount is $ 12,000

Explanation of Solution

(a)

DATE	PARTICULARS	AMOUNT DR	AMOUNT CR
31/12/2016	Cash	188,000
	Discount on bonds payable	12,000
	Bonds payable		2,00,000
	(Being bond sold at discount)

(b)

DATE	PARTICULARS	AMOUNT DR	AMOUNT CR
30/06/2017	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

31/12/2017	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

30/06/2018	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

31/12/2018	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

Working note:

Total Interest= Face value× Rate× No. of years = $ 200,000× 5%2×4
=$20,000
Interest for each semiannual period=Total interest amountNo. of semiannual periods
=$20,0004=$5,000
Discount to be amortized=Total unamortized discountNo. of semiannual periods
=$12,0004=$3,000
Total bond interest expenses= Interest expenses+ Discount amount = $5,000+$3,000 = $8,000

(c)

DATE	PARTICULARS	AMOUNT DR	AMOUNT CR
31/12/2018	Bonds payable	2,00,000
	Cash		2,00,000
	(Being payment made to bondholders at maturity)

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Answer 5

Chapter 10, Problem 5E

Summary Introduction

Introduction: Bond issuance refers to the process of raising ,oney from investors by issuing them bonds. Bonds are assumed debt on the company as there raise the liability of the company.

To determine: At what amount bond was sold at discount

Expert Solution & Answer

Answer to Problem 5E

Bond sold at discount is $ 12,000

Explanation of Solution

(a)

DATE	PARTICULARS	AMOUNT DR	AMOUNT CR
31/12/2016	Cash	188,000
	Discount on bonds payable	12,000
	Bonds payable		2,00,000
	(Being bond sold at discount)

(b)

DATE	PARTICULARS	AMOUNT DR	AMOUNT CR
30/06/2017	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

31/12/2017	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

30/06/2018	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

31/12/2018	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

Working note:

Total Interest= Face value× Rate× No. of years = $ 200,000× 5%2×4
=$20,000
Interest for each semiannual period=Total interest amountNo. of semiannual periods
=$20,0004=$5,000
Discount to be amortized=Total unamortized discountNo. of semiannual periods
=$12,0004=$3,000
Total bond interest expenses= Interest expenses+ Discount amount = $5,000+$3,000 = $8,000

(c)

DATE	PARTICULARS	AMOUNT DR	AMOUNT CR
31/12/2018	Bonds payable	2,00,000
	Cash		2,00,000
	(Being payment made to bondholders at maturity)

Answer 6

Chapter 10, Problem 5E

Summary Introduction

Introduction: Bond issuance refers to the process of raising ,oney from investors by issuing them bonds. Bonds are assumed debt on the company as there raise the liability of the company.

To determine: At what amount bond was sold at discount

Expert Solution & Answer

Answer to Problem 5E

Bond sold at discount is $ 12,000

Explanation of Solution

(a)

DATE	PARTICULARS	AMOUNT DR	AMOUNT CR
31/12/2016	Cash	188,000
	Discount on bonds payable	12,000
	Bonds payable		2,00,000
	(Being bond sold at discount)

(b)

DATE	PARTICULARS	AMOUNT DR	AMOUNT CR
30/06/2017	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

31/12/2017	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

30/06/2018	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

31/12/2018	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

Working note:

Total Interest= Face value× Rate× No. of years = $ 200,000× 5%2×4
=$20,000
Interest for each semiannual period=Total interest amountNo. of semiannual periods
=$20,0004=$5,000
Discount to be amortized=Total unamortized discountNo. of semiannual periods
=$12,0004=$3,000
Total bond interest expenses= Interest expenses+ Discount amount = $5,000+$3,000 = $8,000

(c)

DATE	PARTICULARS	AMOUNT DR	AMOUNT CR
31/12/2018	Bonds payable	2,00,000
	Cash		2,00,000
	(Being payment made to bondholders at maturity)

Answer 7

Chapter 10, Problem 5E

Summary Introduction

Introduction: Bond issuance refers to the process of raising ,oney from investors by issuing them bonds. Bonds are assumed debt on the company as there raise the liability of the company.

To determine: At what amount bond was sold at discount

Answer 8

Expert Solution & Answer

Answer to Problem 5E

Bond sold at discount is $ 12,000

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

(a)

DATE	PARTICULARS	AMOUNT DR	AMOUNT CR
31/12/2016	Cash	188,000
	Discount on bonds payable	12,000
	Bonds payable		2,00,000
	(Being bond sold at discount)

(b)

DATE	PARTICULARS	AMOUNT DR	AMOUNT CR
30/06/2017	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

31/12/2017	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

30/06/2018	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

31/12/2018	Bond interest expenses	8,000
	Discount on bonds payable		3,000
	Cash		5,000
	(Being semiannual interest paid and discount on bonds amortized)

Working note:

Total Interest= Face value× Rate× No. of years = $ 200,000× 5%2×4
=$20,000
Interest for each semiannual period=Total interest amountNo. of semiannual periods
=$20,0004=$5,000
Discount to be amortized=Total unamortized discountNo. of semiannual periods
=$12,0004=$3,000
Total bond interest expenses= Interest expenses+ Discount amount = $5,000+$3,000 = $8,000

(c)

DATE	PARTICULARS	AMOUNT DR	AMOUNT CR
31/12/2018	Bonds payable	2,00,000
	Cash		2,00,000
	(Being payment made to bondholders at maturity)

Answer 12

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

Bond issuance refers to the process of raising ,oney from investors by issuing them bonds. Bonds are assumed debt on the company as there raise the liability of the company. To determine: At what amount bond was sold at discount

Concept explainers

Videos

Introduction: Bond issuance refers to the process of raising ,oney from investors by issuing them bonds. Bonds are assumed debt on the company as there raise the liability of the company.

To determine: At what amount bond was sold at discount

Answer to Problem 5E

Explanation of Solution

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Chapter 10 Solutions

Bond issuance refers to the process of raising ,oney from investors by issuing them bonds. Bonds are assumed debt on the company as there raise the liability of the company. To determine: At what amount bond was sold at discount

Concept explainers

Videos

Introduction: Bond issuance refers to the process of raising ,oney from investors by issuing them bonds. Bonds are assumed debt on the company as there raise the liability of the company. To determine: At what amount bond was sold at discount

Answer to Problem 5E

Explanation of Solution

Want to see more full solutions like this?

Chapter 10 Solutions

Introduction: Bond issuance refers to the process of raising ,oney from investors by issuing them bonds. Bonds are assumed debt on the company as there raise the liability of the company.

To determine: At what amount bond was sold at discount