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 method it 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, 2016.

Question

Bond Premium, Entries for Bonds Payable Transactions, Interest Method of Amortizing Bond Premium Rodgers Corporation produces and sells football equipment. On July 1, 20Y1, Rodgers issued $59,000,000 of 20-year, 14% bonds at a market (effective) interest rate of 12%, receiving cash of $67,862,980. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds. 20Y1 July 1 - Select - - Select - - Select - - Select - - Select - - Select - 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond premium, using the interest method. Round to the nearest dollar. 20Y1 Dec. 31 - Select - - Select…

Answer 1

Question

Chapter 12, Problem 12.6BPR

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 method it 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, 2016.

2. a.

To determine

To prepare: Journal entry to record first semiannual interest payment and amortization of bond premium on December 31, 2016.

b.

To determine

To prepare: Journal entry to record second interest payment and amortization of bond discount on June 30, 2017.

3.

To determine

The amount of total interest expense for 2016.

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Bond Premium, Entries for Bonds Payable Transactions, Interest Method of Amortizing Bond Premium Rodgers Corporation produces and sells football equipment. On July 1, 20Y1, Rodgers issued $59,000,000 of 20-year, 14% bonds at a market (effective) interest rate of 12%, receiving cash of $67,862,980. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds. 20Y1 July 1 - Select - - Select - - Select - - Select - - Select - - Select - 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond premium, using the interest method. Round to the nearest dollar. 20Y1 Dec. 31 - Select - - Select…

Entries for Issuing Bonds and Amortizing Premium by Straight-Line Method Daan Corporation wholesales repair products to equipment manufacturers. On April 1, 2016, Daan Corporation issued $6,300,000 of 4-year, 7% bonds at a market (effective) interest rate of 6%, receiving cash of $6,521,120. Interest is payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 1, 2016. For a compound transaction, if an amount box does not require an entry, leave it blank. b. Journalize the entry to record the first interest payment on October 1, 2016, and amortization of bond premium for six months, using the straight-line method. The bond premium amortization is combined with the semiannual interest payment. (Round to the nearest dollar.) For a compound transaction, if an amount box does not require an entry, leave it blank. c. Why was the company able issue the bonds for $6,521,120 rather than for the face…

Bond Premium, Entries for Bonds Payable Transactions, Interest Method of Amortizing Bond Premium Rodgers Corporation produces and sells football equipment. On July 1, 20Y1, Rodgers issued $67,000,000 of 20-year, 14% bonds at a market (effective) interest rate of 12%, receiving cash of $77,064,740. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.

Answer 2

Question

Chapter 12, Problem 12.6BPR

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 method it 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, 2016.

2. a.

To determine

To prepare: Journal entry to record first semiannual interest payment and amortization of bond premium on December 31, 2016.

b.

To determine

To prepare: Journal entry to record second interest payment and amortization of bond discount on June 30, 2017.

3.

To determine

The amount of total interest expense for 2016.

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Answer 3

Question

Chapter 12, Problem 12.6BPR

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 method it 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, 2016.

2. a.

To determine

To prepare: Journal entry to record first semiannual interest payment and amortization of bond premium on December 31, 2016.

b.

To determine

To prepare: Journal entry to record second interest payment and amortization of bond discount on June 30, 2017.

3.

To determine

The amount of total interest expense for 2016.

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Answer 4

Question

Chapter 12, Problem 12.6BPR

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 method it 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, 2016.

2. a.

To determine

To prepare: Journal entry to record first semiannual interest payment and amortization of bond premium on December 31, 2016.

b.

To determine

To prepare: Journal entry to record second interest payment and amortization of bond discount on June 30, 2017.

3.

To determine

The amount of total interest expense for 2016.

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Answer 5

Chapter 12, Problem 12.6BPR

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 method it 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, 2016.

2. a.

To determine

To prepare: Journal entry to record first semiannual interest payment and amortization of bond premium on December 31, 2016.

b.

To determine

To prepare: Journal entry to record second interest payment and amortization of bond discount on June 30, 2017.

3.

To determine

The amount of total interest expense for 2016.

Answer 6

Chapter 12, Problem 12.6BPR

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 method it 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, 2016.

Answer 7

Chapter 12, Problem 12.6BPR

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 method it 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, 2016.

Answer 8

2. a.

To determine

To prepare: Journal entry to record first semiannual interest payment and amortization of bond premium on December 31, 2016.

Answer 9

2. a.

To determine

To prepare: Journal entry to record first semiannual interest payment and amortization of bond premium on December 31, 2016.

Answer 10

b.

To determine

To prepare: Journal entry to record second interest payment and amortization of bond discount on June 30, 2017.

Answer 11

b.

To determine

To prepare: Journal entry to record second interest payment and amortization of bond discount on June 30, 2017.

Answer 12

3.

To determine

The amount of total interest expense for 2016.

Answer 13

3.

To determine

The amount of total interest expense for 2016.

Answer 14

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Answer 25

Ch. 12 - Describe the two distinct obligations incurred by...Ch. 12 - Explain the meaning of each of the following terms...Ch. 12 - Prob. 3DQ Ch. 12 - A corporation issues 26,000,000 of 9% bonds to...Ch. 12 - Prob. 5DQ Ch. 12 - The following data relate to a 2,000,000, 8% bond...Ch. 12 - Prob. 7DQ Ch. 12 - Prob. 8DQ Ch. 12 - Fleeson Company needs additional funds to purchase...Ch. 12 - Prob. 10DQ

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.

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To prepare: Journal entry to record first semiannual interest payment and amortization of bond premium on December 31, 2016.

To prepare: Journal entry to record second interest payment and amortization of bond discount on June 30, 2017.

The amount of total interest expense for 2016.

Chapter 12 Solutions