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. To calculate: Carrying amount of bonds payable on the retirement date.

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Answer 1

Question

Chapter 12, Problem 12.10SE

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.

To calculate: Carrying amount of bonds payable on the retirement date.

2.

To determine

To determine: The amount of cash to retire the bonds payable.

3.

To determine

To compute: Gain or loss on the retirement of the bonds payable.

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On December 31, 2021, Danny purchased $23,000 of newly issued bonds of Howard Corporation for $19,045. The bonds are dated December 31, 2021. The bonds are 9%, 10-year bonds paying interest semiannually on June 30 and December 31. The bonds are priced to yield 12% compounded semiannually. Read the requirement. Requirement a. What is the amount of the original issue discount? Start by completing the bond amortization table for the first year. (Round all amounts to the nearest dollar.) Year Interest Received December 31, 2021 June 30, 2022 December 31, 2022 Amortization of Original Issue Discount Taxpayers Basis Interest Income for the Bond The amount of the original issue discount is Requirement b. For the first semiannual period, what is the amount of the original issue discount Danny must recognize as ordinary income? (Round the amount to the nearest dollar.) The amount of the original issue discount Danny must recognize as ordinary income for the first semiannual period is…

On January 1, 2017, Shay issues $380,000 of 9%, 15-year bonds at a price of 97.25. Six years later, on January 1, 2023, Shay retires 30% of these bonds by buying them on the open market at 105.25. All interest is accounted for and paid through December 31, 2022, the day before the purchase. The straight-line method is used to amortize any bond discount. 1. How much does the company receive when it issues the bonds on January 1, 2017?

On January 1, 2024, Patel Company issued $300,000 of 5%, five-year bonds payable at 102. Patel Company has extra cash and wishes to retire the bonds payable on January 1, 2025, immediately after making the second semiannual interest payment. To retire the bonds, Patel pays the market price of 89. Read the requirements. (Assume bonds payable are amortized using the straight-line amortization method.) Requirement 1. What is Patel Company's carrying amount of the bonds payable on the retirement date? The carrying amount of the bonds payable on the retirement date is Requirements 1. What is Patel Company's carrying amount of the bonds payable on the retirement date? 2. How much cash must Patel Company pay to retire the bonds payable? 3. Compute Patel Company's gain or loss on the retirement of the bonds payable. Print Done X

Answer 2

Question

Chapter 12, Problem 12.10SE

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.

To calculate: Carrying amount of bonds payable on the retirement date.

2.

To determine

To determine: The amount of cash to retire the bonds payable.

3.

To determine

To compute: Gain or loss on the retirement of the bonds payable.

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Answer 3

Question

Chapter 12, Problem 12.10SE

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.

To calculate: Carrying amount of bonds payable on the retirement date.

2.

To determine

To determine: The amount of cash to retire the bonds payable.

3.

To determine

To compute: Gain or loss on the retirement of the bonds payable.

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Answer 4

Question

Chapter 12, Problem 12.10SE

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.

To calculate: Carrying amount of bonds payable on the retirement date.

2.

To determine

To determine: The amount of cash to retire the bonds payable.

3.

To determine

To compute: Gain or loss on the retirement of the bonds payable.

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Answer 5

Chapter 12, Problem 12.10SE

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.

To calculate: Carrying amount of bonds payable on the retirement date.

2.

To determine

To determine: The amount of cash to retire the bonds payable.

3.

To determine

To compute: Gain or loss on the retirement of the bonds payable.

Answer 6

Chapter 12, Problem 12.10SE

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.

To calculate: Carrying amount of bonds payable on the retirement date.

Answer 7

Chapter 12, Problem 12.10SE

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.

To calculate: Carrying amount of bonds payable on the retirement date.

Answer 8

2.

To determine

To determine: The amount of cash to retire the bonds payable.

Answer 9

2.

To determine

To determine: The amount of cash to retire the bonds payable.

Answer 10

3.

To determine

To compute: Gain or loss on the retirement of the bonds payable.

Answer 11

3.

To determine

To compute: Gain or loss on the retirement of the bonds payable.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 12 - Flipco signed a 10-year note payable on January 1,...Ch. 12 - Daniels's bonds payable carry a stated interest...Ch. 12 - A bond that matures in installments at regular...Ch. 12 - Prob. 4QC Ch. 12 - Nicholas Smith Fitness Gym has 700,000 of 20-year...Ch. 12 - Prob. 6QC Ch. 12 - Prob. 7QC Ch. 12 - The debt to equity ratio is calculated as a. Total...Ch. 12 - Mike Gordon wishes to have 80,000 in five years....Ch. 12 - Prob. 10BQC

Solution Summary: The author explains how to calculate the carrying amount of bonds payable on the retirement date.

To determine: The amount of cash to retire the bonds payable.

To compute: Gain or loss on the retirement of the bonds payable.

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Chapter 12 Solutions