Bond issuance refers to the process of raising, money from investors by issuing the bonds. Bonds are assumed debt on the company as there raise the liability of the company. To determine: Journal entry to record the bond issuance.

Question

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Answer 1

Question

Chapter 10, Problem 5PSA

Summary Introduction

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

To determine: Journal entry to record the bond issuance.

Expert Solution

Answer to Problem 5PSA

Discount on bond issuance is $32,819

Explanation of Solution

Prepare Journal Entry on 1^s^tJanuary 2016

Date	Particulars	Debit	Credit
Jan1	Cash	$292,181
	Discount on bonds payable	$32,819
	Bonds payable		$325,000
	(Being discount on bond issued)

Working Note:-

Discount on bond= ( $325,000−$292,181)Discount on bond= $32,819

2.

Summary Introduction

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

To determine: Total bond interest expenses which is over the lifetime of bond.

2.

Expert Solution

Answer to Problem 5PSA

Total bond interest expenses are $97,819

Explanation of Solution

Determine the total bond interest expense:

Interest expense = Cash paid + Discount on bonds

= ($325,000×5%×4) + ($32,819)

= $65,000+$32,819

= $97,819

3.

Summary Introduction

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

To determine: Under straight line amortization for bonds’ first two years.

3.

Expert Solution

Explanation of Solution

Amortization Table

$32,819/8 =4,102

Date	Unamortized Discount	Carrying Value
1/01/2016	32,819	292,181
30/06/2016	( 32,819−4,102) =28,717	(292,181+4,102) = 296,283
31/12/2016	(28,717−4,102) =24,615	(296,283+4,102) = 300,385
30/06/2017	(24,615−4,102) =20,513	(300,385+4,102) = 304,487
31/12/2017	(20,513−4,102) =16,411	(304,487+4,102) = 308,589

4.

Summary Introduction

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

To determine: Journal entry for interest payments for first two interest payment.

4.

Expert Solution

Explanation of Solution

Date	Particulars	Debit	Credit
30/06/2016	Interest Expense	$11,687.24
	Discount on bonds payable		$3,562.24
	Cash		$8,125
	( Being bonds issued on discount)

31/12/2016	Interest Expense	$11,687.24
	Discount on bonds payable		$3,562.24
	Cash		$8,125
	( Being bonds issued on discount)

Working Note:-

On 30^t^h June 2016,

Interest Expense ($292,181×4%) =$11,687.24

Amortize Discount ($11,687.24−$8,125) =$3,562.24

Cash ($325,000×2.5%) =$8,125

On 31^s^t December 2016,

Interest Expense ($295,743.24×4%) =$11,829.73

Amortize Discount = ($11,829.73−$8,125) =$3,704.73

5.

Summary Introduction

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

To determine: Changes that affect the amount reported on financial statement

5.

Expert Solution

Answer to Problem 5PSA

Bonds are issued at premium as the contract rate is more than the market rate of the bond on date of issue.

Explanation of Solution

Bonds are issued at premium if the contract rate is more than the market rate of the bond on date of issue. On 1 January 2016 market rate is 4% and contract rate of bond is 5%. This implies that the bonds are issued at premium and total amount also includes the amount of premium which is received by issuer from the bondholders.

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Answer 2

Question

Chapter 10, Problem 5PSA

Summary Introduction

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

To determine: Journal entry to record the bond issuance.

Expert Solution

Answer to Problem 5PSA

Discount on bond issuance is $32,819

Explanation of Solution

Prepare Journal Entry on 1^s^tJanuary 2016

Date	Particulars	Debit	Credit
Jan1	Cash	$292,181
	Discount on bonds payable	$32,819
	Bonds payable		$325,000
	(Being discount on bond issued)

Working Note:-

Discount on bond= ( $325,000−$292,181)Discount on bond= $32,819

2.

Summary Introduction

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

To determine: Total bond interest expenses which is over the lifetime of bond.

2.

Expert Solution

Answer to Problem 5PSA

Total bond interest expenses are $97,819

Explanation of Solution

Determine the total bond interest expense:

Interest expense = Cash paid + Discount on bonds

= ($325,000×5%×4) + ($32,819)

= $65,000+$32,819

= $97,819

3.

Summary Introduction

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

To determine: Under straight line amortization for bonds’ first two years.

3.

Expert Solution

Explanation of Solution

Amortization Table

$32,819/8 =4,102

Date	Unamortized Discount	Carrying Value
1/01/2016	32,819	292,181
30/06/2016	( 32,819−4,102) =28,717	(292,181+4,102) = 296,283
31/12/2016	(28,717−4,102) =24,615	(296,283+4,102) = 300,385
30/06/2017	(24,615−4,102) =20,513	(300,385+4,102) = 304,487
31/12/2017	(20,513−4,102) =16,411	(304,487+4,102) = 308,589

4.

Summary Introduction

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

To determine: Journal entry for interest payments for first two interest payment.

4.

Expert Solution

Explanation of Solution

Date	Particulars	Debit	Credit
30/06/2016	Interest Expense	$11,687.24
	Discount on bonds payable		$3,562.24
	Cash		$8,125
	( Being bonds issued on discount)

31/12/2016	Interest Expense	$11,687.24
	Discount on bonds payable		$3,562.24
	Cash		$8,125
	( Being bonds issued on discount)

Working Note:-

On 30^t^h June 2016,

Interest Expense ($292,181×4%) =$11,687.24

Amortize Discount ($11,687.24−$8,125) =$3,562.24

Cash ($325,000×2.5%) =$8,125

On 31^s^t December 2016,

Interest Expense ($295,743.24×4%) =$11,829.73

Amortize Discount = ($11,829.73−$8,125) =$3,704.73

5.

Summary Introduction

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

To determine: Changes that affect the amount reported on financial statement

5.

Expert Solution

Answer to Problem 5PSA

Bonds are issued at premium as the contract rate is more than the market rate of the bond on date of issue.

Explanation of Solution

Bonds are issued at premium if the contract rate is more than the market rate of the bond on date of issue. On 1 January 2016 market rate is 4% and contract rate of bond is 5%. This implies that the bonds are issued at premium and total amount also includes the amount of premium which is received by issuer from the bondholders.

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Answer 3

Question

Chapter 10, Problem 5PSA

Summary Introduction

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

To determine: Journal entry to record the bond issuance.

Expert Solution

Answer to Problem 5PSA

Discount on bond issuance is $32,819

Explanation of Solution

Prepare Journal Entry on 1^s^tJanuary 2016

Date	Particulars	Debit	Credit
Jan1	Cash	$292,181
	Discount on bonds payable	$32,819
	Bonds payable		$325,000
	(Being discount on bond issued)

Working Note:-

Discount on bond= ( $325,000−$292,181)Discount on bond= $32,819

2.

Summary Introduction

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

To determine: Total bond interest expenses which is over the lifetime of bond.

2.

Expert Solution

Answer to Problem 5PSA

Total bond interest expenses are $97,819

Explanation of Solution

Determine the total bond interest expense:

Interest expense = Cash paid + Discount on bonds

= ($325,000×5%×4) + ($32,819)

= $65,000+$32,819

= $97,819

3.

Summary Introduction

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

To determine: Under straight line amortization for bonds’ first two years.

3.

Expert Solution

Explanation of Solution

Amortization Table

$32,819/8 =4,102

Date	Unamortized Discount	Carrying Value
1/01/2016	32,819	292,181
30/06/2016	( 32,819−4,102) =28,717	(292,181+4,102) = 296,283
31/12/2016	(28,717−4,102) =24,615	(296,283+4,102) = 300,385
30/06/2017	(24,615−4,102) =20,513	(300,385+4,102) = 304,487
31/12/2017	(20,513−4,102) =16,411	(304,487+4,102) = 308,589

4.

Summary Introduction

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

To determine: Journal entry for interest payments for first two interest payment.

4.

Expert Solution

Explanation of Solution

Date	Particulars	Debit	Credit
30/06/2016	Interest Expense	$11,687.24
	Discount on bonds payable		$3,562.24
	Cash		$8,125
	( Being bonds issued on discount)

31/12/2016	Interest Expense	$11,687.24
	Discount on bonds payable		$3,562.24
	Cash		$8,125
	( Being bonds issued on discount)

Working Note:-

On 30^t^h June 2016,

Interest Expense ($292,181×4%) =$11,687.24

Amortize Discount ($11,687.24−$8,125) =$3,562.24

Cash ($325,000×2.5%) =$8,125

On 31^s^t December 2016,

Interest Expense ($295,743.24×4%) =$11,829.73

Amortize Discount = ($11,829.73−$8,125) =$3,704.73

5.

Summary Introduction

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

To determine: Changes that affect the amount reported on financial statement

5.

Expert Solution

Answer to Problem 5PSA

Bonds are issued at premium as the contract rate is more than the market rate of the bond on date of issue.

Explanation of Solution

Bonds are issued at premium if the contract rate is more than the market rate of the bond on date of issue. On 1 January 2016 market rate is 4% and contract rate of bond is 5%. This implies that the bonds are issued at premium and total amount also includes the amount of premium which is received by issuer from the bondholders.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 10, Problem 5PSA

Summary Introduction

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

To determine: Journal entry to record the bond issuance.

Expert Solution

Answer to Problem 5PSA

Discount on bond issuance is $32,819

Explanation of Solution

Prepare Journal Entry on 1^s^tJanuary 2016

Date	Particulars	Debit	Credit
Jan1	Cash	$292,181
	Discount on bonds payable	$32,819
	Bonds payable		$325,000
	(Being discount on bond issued)

Working Note:-

Discount on bond= ( $325,000−$292,181)Discount on bond= $32,819

2.

Summary Introduction

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

To determine: Total bond interest expenses which is over the lifetime of bond.

2.

Expert Solution

Answer to Problem 5PSA

Total bond interest expenses are $97,819

Explanation of Solution

Determine the total bond interest expense:

Interest expense = Cash paid + Discount on bonds

= ($325,000×5%×4) + ($32,819)

= $65,000+$32,819

= $97,819

3.

Summary Introduction

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

To determine: Under straight line amortization for bonds’ first two years.

3.

Expert Solution

Explanation of Solution

Amortization Table

$32,819/8 =4,102

Date	Unamortized Discount	Carrying Value
1/01/2016	32,819	292,181
30/06/2016	( 32,819−4,102) =28,717	(292,181+4,102) = 296,283
31/12/2016	(28,717−4,102) =24,615	(296,283+4,102) = 300,385
30/06/2017	(24,615−4,102) =20,513	(300,385+4,102) = 304,487
31/12/2017	(20,513−4,102) =16,411	(304,487+4,102) = 308,589

4.

Summary Introduction

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

To determine: Journal entry for interest payments for first two interest payment.

4.

Expert Solution

Explanation of Solution

Date	Particulars	Debit	Credit
30/06/2016	Interest Expense	$11,687.24
	Discount on bonds payable		$3,562.24
	Cash		$8,125
	( Being bonds issued on discount)

31/12/2016	Interest Expense	$11,687.24
	Discount on bonds payable		$3,562.24
	Cash		$8,125
	( Being bonds issued on discount)

Working Note:-

On 30^t^h June 2016,

Interest Expense ($292,181×4%) =$11,687.24

Amortize Discount ($11,687.24−$8,125) =$3,562.24

Cash ($325,000×2.5%) =$8,125

On 31^s^t December 2016,

Interest Expense ($295,743.24×4%) =$11,829.73

Amortize Discount = ($11,829.73−$8,125) =$3,704.73

5.

Summary Introduction

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

To determine: Changes that affect the amount reported on financial statement

5.

Expert Solution

Answer to Problem 5PSA

Bonds are issued at premium as the contract rate is more than the market rate of the bond on date of issue.

Explanation of Solution

Bonds are issued at premium if the contract rate is more than the market rate of the bond on date of issue. On 1 January 2016 market rate is 4% and contract rate of bond is 5%. This implies that the bonds are issued at premium and total amount also includes the amount of premium which is received by issuer from the bondholders.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 10, Problem 5PSA

Summary Introduction

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

To determine: Journal entry to record the bond issuance.

Expert Solution

Answer to Problem 5PSA

Discount on bond issuance is $32,819

Explanation of Solution

Prepare Journal Entry on 1^s^tJanuary 2016

Date	Particulars	Debit	Credit
Jan1	Cash	$292,181
	Discount on bonds payable	$32,819
	Bonds payable		$325,000
	(Being discount on bond issued)

Working Note:-

Discount on bond= ( $325,000−$292,181)Discount on bond= $32,819

2.

Summary Introduction

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

To determine: Total bond interest expenses which is over the lifetime of bond.

2.

Expert Solution

Answer to Problem 5PSA

Total bond interest expenses are $97,819

Explanation of Solution

Determine the total bond interest expense:

Interest expense = Cash paid + Discount on bonds

= ($325,000×5%×4) + ($32,819)

= $65,000+$32,819

= $97,819

3.

Summary Introduction

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

To determine: Under straight line amortization for bonds’ first two years.

3.

Expert Solution

Explanation of Solution

Amortization Table

$32,819/8 =4,102

Date	Unamortized Discount	Carrying Value
1/01/2016	32,819	292,181
30/06/2016	( 32,819−4,102) =28,717	(292,181+4,102) = 296,283
31/12/2016	(28,717−4,102) =24,615	(296,283+4,102) = 300,385
30/06/2017	(24,615−4,102) =20,513	(300,385+4,102) = 304,487
31/12/2017	(20,513−4,102) =16,411	(304,487+4,102) = 308,589

4.

Summary Introduction

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

To determine: Journal entry for interest payments for first two interest payment.

4.

Expert Solution

Explanation of Solution

Date	Particulars	Debit	Credit
30/06/2016	Interest Expense	$11,687.24
	Discount on bonds payable		$3,562.24
	Cash		$8,125
	( Being bonds issued on discount)

31/12/2016	Interest Expense	$11,687.24
	Discount on bonds payable		$3,562.24
	Cash		$8,125
	( Being bonds issued on discount)

Working Note:-

On 30^t^h June 2016,

Interest Expense ($292,181×4%) =$11,687.24

Amortize Discount ($11,687.24−$8,125) =$3,562.24

Cash ($325,000×2.5%) =$8,125

On 31^s^t December 2016,

Interest Expense ($295,743.24×4%) =$11,829.73

Amortize Discount = ($11,829.73−$8,125) =$3,704.73

5.

Summary Introduction

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

To determine: Changes that affect the amount reported on financial statement

5.

Expert Solution

Answer to Problem 5PSA

Bonds are issued at premium as the contract rate is more than the market rate of the bond on date of issue.

Explanation of Solution

Bonds are issued at premium if the contract rate is more than the market rate of the bond on date of issue. On 1 January 2016 market rate is 4% and contract rate of bond is 5%. This implies that the bonds are issued at premium and total amount also includes the amount of premium which is received by issuer from the bondholders.

Answer 6

Chapter 10, Problem 5PSA

Summary Introduction

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

To determine: Journal entry to record the bond issuance.

Expert Solution

Answer to Problem 5PSA

Discount on bond issuance is $32,819

Explanation of Solution

Prepare Journal Entry on 1^s^tJanuary 2016

Date	Particulars	Debit	Credit
Jan1	Cash	$292,181
	Discount on bonds payable	$32,819
	Bonds payable		$325,000
	(Being discount on bond issued)

Working Note:-

Discount on bond= ( $325,000−$292,181)Discount on bond= $32,819

Answer 7

Chapter 10, Problem 5PSA

Summary Introduction

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

To determine: Journal entry to record the bond issuance.

Answer 8

Expert Solution

Answer to Problem 5PSA

Discount on bond issuance is $32,819

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Prepare Journal Entry on 1^s^tJanuary 2016

Date	Particulars	Debit	Credit
Jan1	Cash	$292,181
	Discount on bonds payable	$32,819
	Bonds payable		$325,000
	(Being discount on bond issued)

Working Note:-

Discount on bond= ( $325,000−$292,181)Discount on bond= $32,819

Answer 13

2.

Summary Introduction

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

To determine: Total bond interest expenses which is over the lifetime of bond.

2.

Expert Solution

Answer to Problem 5PSA

Total bond interest expenses are $97,819

Explanation of Solution

Determine the total bond interest expense:

Interest expense = Cash paid + Discount on bonds

= ($325,000×5%×4) + ($32,819)

= $65,000+$32,819

= $97,819

Answer 14

2.

Summary Introduction

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

To determine: Total bond interest expenses which is over the lifetime of bond.

Answer 15

2.

Expert Solution

Answer to Problem 5PSA

Total bond interest expenses are $97,819

Answer 16

2.

Expert Solution

Answer 17

2.

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

Determine the total bond interest expense:

Interest expense = Cash paid + Discount on bonds

= ($325,000×5%×4) + ($32,819)

= $65,000+$32,819

= $97,819

Answer 20

3.

Summary Introduction

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

To determine: Under straight line amortization for bonds’ first two years.

3.

Expert Solution

Explanation of Solution

Amortization Table

$32,819/8 =4,102

Date	Unamortized Discount	Carrying Value
1/01/2016	32,819	292,181
30/06/2016	( 32,819−4,102) =28,717	(292,181+4,102) = 296,283
31/12/2016	(28,717−4,102) =24,615	(296,283+4,102) = 300,385
30/06/2017	(24,615−4,102) =20,513	(300,385+4,102) = 304,487
31/12/2017	(20,513−4,102) =16,411	(304,487+4,102) = 308,589

Answer 21

3.

Summary Introduction

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

To determine: Under straight line amortization for bonds’ first two years.

Answer 22

3.

Expert Solution

Explanation of Solution

Amortization Table

$32,819/8 =4,102

Date	Unamortized Discount	Carrying Value
1/01/2016	32,819	292,181
30/06/2016	( 32,819−4,102) =28,717	(292,181+4,102) = 296,283
31/12/2016	(28,717−4,102) =24,615	(296,283+4,102) = 300,385
30/06/2017	(24,615−4,102) =20,513	(300,385+4,102) = 304,487
31/12/2017	(20,513−4,102) =16,411	(304,487+4,102) = 308,589

Answer 23

3.

Expert Solution

Answer 24

3.

Expert Solution

Answer 25

Expert Solution

Answer 26

4.

Summary Introduction

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

To determine: Journal entry for interest payments for first two interest payment.

4.

Expert Solution

Explanation of Solution

Date	Particulars	Debit	Credit
30/06/2016	Interest Expense	$11,687.24
	Discount on bonds payable		$3,562.24
	Cash		$8,125
	( Being bonds issued on discount)

31/12/2016	Interest Expense	$11,687.24
	Discount on bonds payable		$3,562.24
	Cash		$8,125
	( Being bonds issued on discount)

Working Note:-

On 30^t^h June 2016,

Interest Expense ($292,181×4%) =$11,687.24

Amortize Discount ($11,687.24−$8,125) =$3,562.24

Cash ($325,000×2.5%) =$8,125

On 31^s^t December 2016,

Interest Expense ($295,743.24×4%) =$11,829.73

Amortize Discount = ($11,829.73−$8,125) =$3,704.73

Answer 27

4.

Summary Introduction

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

To determine: Journal entry for interest payments for first two interest payment.

Answer 28

4.

Expert Solution

Explanation of Solution

Date	Particulars	Debit	Credit
30/06/2016	Interest Expense	$11,687.24
	Discount on bonds payable		$3,562.24
	Cash		$8,125
	( Being bonds issued on discount)

31/12/2016	Interest Expense	$11,687.24
	Discount on bonds payable		$3,562.24
	Cash		$8,125
	( Being bonds issued on discount)

Working Note:-

On 30^t^h June 2016,

Interest Expense ($292,181×4%) =$11,687.24

Amortize Discount ($11,687.24−$8,125) =$3,562.24

Cash ($325,000×2.5%) =$8,125

On 31^s^t December 2016,

Interest Expense ($295,743.24×4%) =$11,829.73

Amortize Discount = ($11,829.73−$8,125) =$3,704.73

Answer 29

4.

Expert Solution

Answer 30

4.

Expert Solution

Answer 31

Expert Solution

Answer 32

5.

Summary Introduction

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

To determine: Changes that affect the amount reported on financial statement

5.

Expert Solution

Answer to Problem 5PSA

Bonds are issued at premium as the contract rate is more than the market rate of the bond on date of issue.

Explanation of Solution

Bonds are issued at premium if the contract rate is more than the market rate of the bond on date of issue. On 1 January 2016 market rate is 4% and contract rate of bond is 5%. This implies that the bonds are issued at premium and total amount also includes the amount of premium which is received by issuer from the bondholders.

Answer 33

5.

Summary Introduction

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

To determine: Changes that affect the amount reported on financial statement

Answer 34

5.

Expert Solution

Answer to Problem 5PSA

Bonds are issued at premium as the contract rate is more than the market rate of the bond on date of issue.

Answer 35

5.

Expert Solution

Answer 36

5.

Expert Solution

Answer 37

Expert Solution

Answer 38

Explanation of Solution

Bonds are issued at premium if the contract rate is more than the market rate of the bond on date of issue. On 1 January 2016 market rate is 4% and contract rate of bond is 5%. This implies that the bonds are issued at premium and total amount also includes the amount of premium which is received by issuer from the bondholders.

Answer 39

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, money from investors by issuing the bonds. Bonds are assumed debt on the company as there raise the liability of the company. To determine: Journal entry to record the bond issuance.

Introduction:Bond issuance refers to the process of raising, money from investors by issuing the bonds. Bonds are assumed debt on the company as there raise the liability of the company. To determine: Journal entry to record the bond issuance.

Answer to Problem 5PSA

Explanation of Solution

Introduction: Bond issuance refers to the process of raising, money from investors by issuing the bonds. Bonds are assumed debt on the company as there raise the liability of the company. To determine: Total bond interest expenses which is over the lifetime of bond.

Answer to Problem 5PSA

Explanation of Solution

Introduction: Bond issuance refers to the process of raising, money from investors by issuing the bonds. Bonds are assumed debt on the company as there raise the liability of the company. To determine: Under straight line amortization for bonds’ first two years.

Explanation of Solution

Introduction: Bond issuance refers to the process of raising, money from investors by issuing the bonds. Bonds are assumed debt on the company as there raise the liability of the company. To determine: Journal entry for interest payments for first two interest payment.

Explanation of Solution

Introduction: Bond issuance refers to the process of raising, money from investors by issuing the bonds. Bonds are assumed debt on the company as there raise the liability of the company. To determine: Changes that affect the amount reported on financial statement

Answer to Problem 5PSA

Explanation of Solution

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Chapter 10 Solutions

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

To determine: Journal entry to record the bond issuance.

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

To determine: Total bond interest expenses which is over the lifetime of bond.

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

To determine: Under straight line amortization for bonds’ first two years.

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

To determine: Journal entry for interest payments for first two interest payment.

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

To determine: Changes that affect the amount reported on financial statement