Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations. Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations. Premium on bonds payable: It occurs when the bonds are issued at a high price than the face value. Effective-interest amortization method: Effective-interest amortization methodit is an amortization model that apportions the amount of bond discount or premium based on the market interest rate. To prepare : Journal entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1.
Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations. Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations. Premium on bonds payable: It occurs when the bonds are issued at a high price than the face value. Effective-interest amortization method: Effective-interest amortization methodit is an amortization model that apportions the amount of bond discount or premium based on the market interest rate. To prepare : Journal entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1.
Solution Summary: The author explains that bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.
Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.
Chapter 11, Problem 11.5APR
1.
To determine
Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.
Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations.
Premium on bonds payable: It occurs when the bonds are issued at a high price than the face value.
Effective-interest amortization method: Effective-interest amortization methodit is an amortization model that apportions the amount of bond discount or premium based on the market interest rate.
To prepare: Journal entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1.
2.
A.
To determine
To prepare: Journal entry to record first semiannual interest payment and amortization of bond premium on December 31, Year 1.
B.
To determine
To prepare: Journal entry to record second interest payment and amortization of bond discount on June 30, Year 2.
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