Bonds Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond. Early Extinguishment debt When the debt obligations are retired before its scheduled maturity date, the transactions are referred to as early extinguishment of debt. The debt is paid at the market price of the debt and for any difference between the book value of the debt with its market price; the business recognizes the gain or loss on early extinguishment of the debt. To Find out: The recording conversion of the 6% convertible bonds into common stock using the book value method and market value method, it would be affect earnings, how much amount would be differ.

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I need help with this general accounting problem using proper accounting guidelines.

Answer 1

Question

Chapter 14, Problem 14.11BYP

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Early Extinguishment debt

When the debt obligations are retired before its scheduled maturity date, the transactions are referred to as early extinguishment of debt. The debt is paid at the market price of the debt and for any difference between the book value of the debt with its market price; the business recognizes the gain or loss on early extinguishment of the debt.

To Find out: The recording conversion of the 6% convertible bonds into common stock using the book value method and market value method, it would be affect earnings, how much amount would be differ.

2.

To determine

To Explain: The 7% bonds issued at a face value, or discount or premium.

3.

To determine

To Explain: The amount of interest expense for the 7% bonds is higher in the first year or second year of the term to maturity.

4.

To determine

To Explain: The gain or loss on early extinguishment of debt would be determined. Does the early extinguishment of the 7% bonds result in gain or loss?

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Answer 2

Question

Chapter 14, Problem 14.11BYP

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Early Extinguishment debt

When the debt obligations are retired before its scheduled maturity date, the transactions are referred to as early extinguishment of debt. The debt is paid at the market price of the debt and for any difference between the book value of the debt with its market price; the business recognizes the gain or loss on early extinguishment of the debt.

To Find out: The recording conversion of the 6% convertible bonds into common stock using the book value method and market value method, it would be affect earnings, how much amount would be differ.

2.

To determine

To Explain: The 7% bonds issued at a face value, or discount or premium.

3.

To determine

To Explain: The amount of interest expense for the 7% bonds is higher in the first year or second year of the term to maturity.

4.

To determine

To Explain: The gain or loss on early extinguishment of debt would be determined. Does the early extinguishment of the 7% bonds result in gain or loss?

Expert Solution & Answer

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Answer 3

Question

Chapter 14, Problem 14.11BYP

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Early Extinguishment debt

When the debt obligations are retired before its scheduled maturity date, the transactions are referred to as early extinguishment of debt. The debt is paid at the market price of the debt and for any difference between the book value of the debt with its market price; the business recognizes the gain or loss on early extinguishment of the debt.

To Find out: The recording conversion of the 6% convertible bonds into common stock using the book value method and market value method, it would be affect earnings, how much amount would be differ.

2.

To determine

To Explain: The 7% bonds issued at a face value, or discount or premium.

3.

To determine

To Explain: The amount of interest expense for the 7% bonds is higher in the first year or second year of the term to maturity.

4.

To determine

To Explain: The gain or loss on early extinguishment of debt would be determined. Does the early extinguishment of the 7% bonds result in gain or loss?

Expert Solution & Answer

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Answer 4

Question

Chapter 14, Problem 14.11BYP

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Early Extinguishment debt

When the debt obligations are retired before its scheduled maturity date, the transactions are referred to as early extinguishment of debt. The debt is paid at the market price of the debt and for any difference between the book value of the debt with its market price; the business recognizes the gain or loss on early extinguishment of the debt.

To Find out: The recording conversion of the 6% convertible bonds into common stock using the book value method and market value method, it would be affect earnings, how much amount would be differ.

2.

To determine

To Explain: The 7% bonds issued at a face value, or discount or premium.

3.

To determine

To Explain: The amount of interest expense for the 7% bonds is higher in the first year or second year of the term to maturity.

4.

To determine

To Explain: The gain or loss on early extinguishment of debt would be determined. Does the early extinguishment of the 7% bonds result in gain or loss?

Expert Solution & Answer

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Answer 5

Chapter 14, Problem 14.11BYP

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Early Extinguishment debt

When the debt obligations are retired before its scheduled maturity date, the transactions are referred to as early extinguishment of debt. The debt is paid at the market price of the debt and for any difference between the book value of the debt with its market price; the business recognizes the gain or loss on early extinguishment of the debt.

To Find out: The recording conversion of the 6% convertible bonds into common stock using the book value method and market value method, it would be affect earnings, how much amount would be differ.

2.

To determine

To Explain: The 7% bonds issued at a face value, or discount or premium.

3.

To determine

To Explain: The amount of interest expense for the 7% bonds is higher in the first year or second year of the term to maturity.

4.

To determine

To Explain: The gain or loss on early extinguishment of debt would be determined. Does the early extinguishment of the 7% bonds result in gain or loss?

Answer 6

Chapter 14, Problem 14.11BYP

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Early Extinguishment debt

When the debt obligations are retired before its scheduled maturity date, the transactions are referred to as early extinguishment of debt. The debt is paid at the market price of the debt and for any difference between the book value of the debt with its market price; the business recognizes the gain or loss on early extinguishment of the debt.

To Find out: The recording conversion of the 6% convertible bonds into common stock using the book value method and market value method, it would be affect earnings, how much amount would be differ.

Answer 7

Chapter 14, Problem 14.11BYP

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Early Extinguishment debt

When the debt obligations are retired before its scheduled maturity date, the transactions are referred to as early extinguishment of debt. The debt is paid at the market price of the debt and for any difference between the book value of the debt with its market price; the business recognizes the gain or loss on early extinguishment of the debt.

To Find out: The recording conversion of the 6% convertible bonds into common stock using the book value method and market value method, it would be affect earnings, how much amount would be differ.

Answer 8

2.

To determine

To Explain: The 7% bonds issued at a face value, or discount or premium.

Answer 9

2.

To determine

To Explain: The 7% bonds issued at a face value, or discount or premium.

Answer 10

3.

To determine

To Explain: The amount of interest expense for the 7% bonds is higher in the first year or second year of the term to maturity.

Answer 11

3.

To determine

To Explain: The amount of interest expense for the 7% bonds is higher in the first year or second year of the term to maturity.

Answer 12

4.

To determine

To Explain: The gain or loss on early extinguishment of debt would be determined. Does the early extinguishment of the 7% bonds result in gain or loss?

Answer 13

4.

To determine

To Explain: The gain or loss on early extinguishment of debt would be determined. Does the early extinguishment of the 7% bonds result in gain or loss?

Answer 14

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Answer 25

Ch. 14 - How is periodic interest determined for...Ch. 14 - As a general rule, how should long-term...Ch. 14 - How are bonds and notes the same? How do they...Ch. 14 - What information is contained in a bond indenture?...Ch. 14 - Prob. 14.5Q Ch. 14 - How is the price determined for a bond (or bond...Ch. 14 - A zero-coupon bond pays no interest. Explain.Ch. 14 - Prob. 14.8Q Ch. 14 - Compare the two commonly used methods of...Ch. 14 - Prob. 14.10Q

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To Explain: The 7% bonds issued at a face value, or discount or premium.

To Explain: The amount of interest expense for the 7% bonds is higher in the first year or second year of the term to maturity.

To Explain: The gain or loss on early extinguishment of debt would be determined. Does the early extinguishment of the 7% bonds result in gain or loss?

Chapter 14 Solutions