The journal for recording derecognition of the obligation. Given information: Company issued bonds worth $4,500,000. Term period for conversion is 5 years Interest is payable semi-annually each January 1 and July 1. Market rate of interest is 10%. Bonds retired at $4,000,000.

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Answer 1

Question

Chapter 14, Problem 14.22BE

To determine

To prepare: The journal for recording derecognition of the obligation.

Given information:

Company issued bonds worth $4,500,000.

Term period for conversion is 5 years

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

Market rate of interest is 10%.

Bonds retired at $4,000,000.

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On January 1, Topeka Outfitters issued $175,000 of 6%, 3-year bonds when the market rate of interest was 10%. The bonds pay interest semiannually on June 30 and December 31. A. How much are the proceeds that Topeka Outfitters? will receive on the issue date of the bonds? B. Prepare an amortization table for the bond issue. C. If the bonds are retired at the end of Year 2 at 104.5% of the maturity value, how much gain or loss on retirement will be reported?

The Ginsberg Co. issued 10-year bonds on April 30, YR 1. The debt has a face value of $1,000,000 and an annual stated interest rate of 8%. Interest payments are due semiannually beginning October 31, YR 1. The market interest rate on the bonds is 10%. Ginsberg amortizes any discount or premium using the effective interest method and has a fiscal year-end of December 31. In addition, Ginsberg incurs $30,000 of bond issue costs related to this bond issue. Ginsberg uses a straight line to recognize bond issue costs at the end of each year.What is the carrying value of the bond on Oct. 31, YR2? Round UP to the whole dollar (no cost).Provide answers to the following questions along with your carrying value on 10/31/YR2.PV(i= %, n= , pmt= , FV= , 0) = Carrying Value on 10/31/YR2

Southwest Corporation issued bonds with the following details: Face value: $700,000 Interest: 10 percent per year payable each December 31 Terms: Bonds dated January 1, 2018, due five years from that date The annual accounting period ends December 31. The bonds were issued at 103 on January 1, 2018, when the market interest rate was 9 percent. Assume the company uses straight-line amortization and adjusts for any rounding errors when recording interest expense in the final year. Required: 1. Compute the cash received from the bond issuance in dollars. TIP: The issue price typically is quoted at a percentage of face value. 2. & 3. Prepare the journal entry to record the issuance of the bonds and the payment of interest on December 31, 2018 and 2019. 4-a. How much interest expense would be reported on the income statements for 2018 and 2019? 4-b. Compute the bond value which should be reported on the balance sheets at December 31, 2018 and 2019.

Answer 2

Question

Chapter 14, Problem 14.22BE

To determine

To prepare: The journal for recording derecognition of the obligation.

Given information:

Company issued bonds worth $4,500,000.

Term period for conversion is 5 years

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

Market rate of interest is 10%.

Bonds retired at $4,000,000.

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Answer 3

Question

Chapter 14, Problem 14.22BE

To determine

To prepare: The journal for recording derecognition of the obligation.

Given information:

Company issued bonds worth $4,500,000.

Term period for conversion is 5 years

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

Market rate of interest is 10%.

Bonds retired at $4,000,000.

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Answer 4

Question

Chapter 14, Problem 14.22BE

To determine

To prepare: The journal for recording derecognition of the obligation.

Given information:

Company issued bonds worth $4,500,000.

Term period for conversion is 5 years

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

Market rate of interest is 10%.

Bonds retired at $4,000,000.

Expert Solution & Answer

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Answer 5

Chapter 14, Problem 14.22BE

To determine

To prepare: The journal for recording derecognition of the obligation.

Given information:

Company issued bonds worth $4,500,000.

Term period for conversion is 5 years

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

Market rate of interest is 10%.

Bonds retired at $4,000,000.

Answer 6

Chapter 14, Problem 14.22BE

To determine

To prepare: The journal for recording derecognition of the obligation.

Given information:

Company issued bonds worth $4,500,000.

Term period for conversion is 5 years

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

Market rate of interest is 10%.

Bonds retired at $4,000,000.

Answer 7

Chapter 14, Problem 14.22BE

To determine

To prepare: The journal for recording derecognition of the obligation.

Given information:

Company issued bonds worth $4,500,000.

Term period for conversion is 5 years

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

Market rate of interest is 10%.

Bonds retired at $4,000,000.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 14 - What conditions or terms does a note payable...Ch. 14 - If the market rate of interest exceeds the face or...Ch. 14 - What is included in bond issue costs and how...Ch. 14 - Prob. 14.4Q Ch. 14 - When a bond is issued at a discount, will its...Ch. 14 - Prob. 14.6Q Ch. 14 - Prob. 14.7Q Ch. 14 - Under IFRS, how do firms account for convertible...Ch. 14 - Prob. 14.9Q Ch. 14 - Can companies reclassify short-term debt expected...

The journal for recording derecognition of the obligation. Given information: Company issued bonds worth $4,500,000. Term period for conversion is 5 years Interest is payable semi-annually each January 1 and July 1. Market rate of interest is 10%. Bonds retired at $4,000,000.

Solution Summary: The author explains the process of journalizing the transactions of an organization in a chronological order.

To prepare: The journal for recording derecognition of the obligation.

Given information:

Company issued bonds worth $4,500,000.

Term period for conversion is 5 years

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

Market rate of interest is 10%.

Bonds retired at $4,000,000.

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Chapter 14 Solutions

The journal for recording derecognition of the obligation. Given information: Company issued bonds worth $4,500,000. Term period for conversion is 5 years Interest is payable semi-annually each January 1 and July 1. Market rate of interest is 10%. Bonds retired at $4,000,000.

Solution Summary: The author explains the process of journalizing the transactions of an organization in a chronological order.

To prepare: The journal for recording derecognition of the obligation. Given information: Company issued bonds worth $4,500,000. Term period for conversion is 5 years Interest is payable semi-annually each January 1 and July 1. Market rate of interest is 10%. Bonds retired at $4,000,000.

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Chapter 14 Solutions

To prepare: The journal for recording derecognition of the obligation.

Given information:

Company issued bonds worth $4,500,000.

Term period for conversion is 5 years

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

Market rate of interest is 10%.

Bonds retired at $4,000,000.