The issue price of the bond as per IFRS. Given information: Company issued bonds worth $850,000. Term period for conversion is 6 years Interest is payable semi-annually each January 1 and July 1. Market rate of interest is 10%. Effective rate of interest is 8%.

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Answer 1

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 14, Problem 14.15E

a.

To determine

The issue price of the bond as per IFRS.

Given information:

Company issued bonds worth $850,000.

Term period for conversion is 6 years

Interest is payable semi-annually each January 1 and July 1.

Market rate of interest is 10%.

Effective rate of interest is 8%.

b.

To determine

To prepare: The amortization table for the bond issue as per IFRS.

c.

To determine

To prepare: The journal for recording the required entries on the date of issue.

d.

To determine

To prepare: The journal for recording conversion of bond at the end of third year as on January 1, 2021.

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Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 14, Problem 14.15E

a.

To determine

The issue price of the bond as per IFRS.

Given information:

Company issued bonds worth $850,000.

Term period for conversion is 6 years

Interest is payable semi-annually each January 1 and July 1.

Market rate of interest is 10%.

Effective rate of interest is 8%.

b.

To determine

To prepare: The amortization table for the bond issue as per IFRS.

c.

To determine

To prepare: The journal for recording the required entries on the date of issue.

d.

To determine

To prepare: The journal for recording conversion of bond at the end of third year as on January 1, 2021.

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 14, Problem 14.15E

a.

To determine

The issue price of the bond as per IFRS.

Given information:

Company issued bonds worth $850,000.

Term period for conversion is 6 years

Interest is payable semi-annually each January 1 and July 1.

Market rate of interest is 10%.

Effective rate of interest is 8%.

b.

To determine

To prepare: The amortization table for the bond issue as per IFRS.

c.

To determine

To prepare: The journal for recording the required entries on the date of issue.

d.

To determine

To prepare: The journal for recording conversion of bond at the end of third year as on January 1, 2021.

Expert Solution & Answer

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 14, Problem 14.15E

a.

To determine

The issue price of the bond as per IFRS.

Given information:

Company issued bonds worth $850,000.

Term period for conversion is 6 years

Interest is payable semi-annually each January 1 and July 1.

Market rate of interest is 10%.

Effective rate of interest is 8%.

b.

To determine

To prepare: The amortization table for the bond issue as per IFRS.

c.

To determine

To prepare: The journal for recording the required entries on the date of issue.

d.

To determine

To prepare: The journal for recording conversion of bond at the end of third year as on January 1, 2021.

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Answer 5

Chapter 14, Problem 14.15E

a.

To determine

The issue price of the bond as per IFRS.

Given information:

Company issued bonds worth $850,000.

Term period for conversion is 6 years

Interest is payable semi-annually each January 1 and July 1.

Market rate of interest is 10%.

Effective rate of interest is 8%.

b.

To determine

To prepare: The amortization table for the bond issue as per IFRS.

c.

To determine

To prepare: The journal for recording the required entries on the date of issue.

d.

To determine

To prepare: The journal for recording conversion of bond at the end of third year as on January 1, 2021.

Answer 6

Chapter 14, Problem 14.15E

a.

To determine

The issue price of the bond as per IFRS.

Given information:

Company issued bonds worth $850,000.

Term period for conversion is 6 years

Interest is payable semi-annually each January 1 and July 1.

Market rate of interest is 10%.

Effective rate of interest is 8%.

Answer 7

Chapter 14, Problem 14.15E

a.

To determine

The issue price of the bond as per IFRS.

Given information:

Company issued bonds worth $850,000.

Term period for conversion is 6 years

Interest is payable semi-annually each January 1 and July 1.

Market rate of interest is 10%.

Effective rate of interest is 8%.

Answer 8

b.

To determine

To prepare: The amortization table for the bond issue as per IFRS.

Answer 9

b.

To determine

To prepare: The amortization table for the bond issue as per IFRS.

Answer 10

c.

To determine

To prepare: The journal for recording the required entries on the date of issue.

Answer 11

c.

To determine

To prepare: The journal for recording the required entries on the date of issue.

Answer 12

d.

To determine

To prepare: The journal for recording conversion of bond at the end of third year as on January 1, 2021.

Answer 13

d.

To determine

To prepare: The journal for recording conversion of bond at the end of third year as on January 1, 2021.

Answer 14

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Answer 15

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Answer 16

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Answer 17

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The issue price of the bond as per IFRS. Given information: Company issued bonds worth $850,000. Term period for conversion is 6 years Interest is payable semi-annually each January 1 and July 1. Market rate of interest is 10%. Effective rate of interest is 8%.

Solution Summary: The author calculates the issue price of the bond by multiplying the historical market rate of interest by the beginning balance of debt.

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The issue price of the bond as per IFRS.

Given information:

Company issued bonds worth $850,000.

Term period for conversion is 6 years

Interest is payable semi-annually each January 1 and July 1.

Market rate of interest is 10%.

Effective rate of interest is 8%.

To prepare: The amortization table for the bond issue as per IFRS.

To prepare: The journal for recording the required entries on the date of issue.

To prepare: The journal for recording conversion of bond at the end of third year as on January 1, 2021.

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Chapter 14 Solutions