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. Straight-line amortization bond Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment. Effective interest rate of amortization bond Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate. To Identify: The face amount of the bonds.

Question

Want to see the full answer?

Answer 1

Question

Chapter 14, Problem 14.4P

(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.

Straight-line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To Identify: The face amount of the bonds.

(2)

To determine

To Identify: The selling price of the bonds.

(3)

To determine

To Identify: The term to maturity in years.

(4)

To determine

Which approach method is used in the Amortization schedule?

(5)

To determine

To Identify: The stated annual interest rate.

(6)

To determine

To Identify: The effective annual interest rate.

(7)

To determine

To Identify: The Cash interest paid over the term to maturity period.

(8)

To determine

To Identify: The total effective interest expense recorded over the term to maturity.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Repsola is a drilling company that operates an offshore Oilfield in Feeland. Five years ago, Feeland had a major oil discovery and granted licenses to drill oil to reputable,experienced drilling companies. The licensing agreement requires the company to remove the oil rig at the end of production and restore the seabed. Ninety percent of the eventual costs of undertaking the work relate to the removal of the oil rig and restoration of damage caused by building it and ten percent arise through the extraction of the oil. At the Statement of Financial Position (SOFP) date (December 31 2025), the rig has been constructed but no oil has been extractedOn January 1st 2023, Repsola obtained the license to construct an oil rig at a cost of $500 million. Two years later the oil rig was completed. The rig is expected to be removed in 20 years from the date of acquisition. The estimated eventual cost is 100million. The company’s cost of capital is 10% and its year end is December 31st. Repsola…

(a) A property lease includes a requirement that the premises are to be repainted every five years and the future cost is estimated at $100,000. The lessee prefers to spread the cost over the five years by charging $$20,000 against profits each year. Thereby creating a provision of $100,000 in five years’ time and affecting profits equally each year. Requirement: Was it correct for the lessee to provide for this cost? Explain your decision (5 marks) (b) A retail store has a policy of refunding purchases by dissatisfied customers, even though it is under no legal obligation. Its policy of making refunds is generally known. Requirements: Should a provision be made at year end (9 marks

Part A Unique Schools Supplies & Uniforms (USSU) designs and manufactures knapsack bags for students. After production, the bags are placed into individual cases, before being transferred into Finished Goods. The accounting records of the business reflect the following data at June 30, 2024, for the manufacturing of bags for Debe High School. Inventory Raw Materials 1/7/2023 30/6/2024 $230,000 $260,000 Work in Progress $348,300 $203,300 Finished Goods $632,900 $485,000 Other information: Sales Revenue Factory Supplies Used Direct Factory Labor Raw Materials Purchased Plant janitorial service Depreciation: Plant & Equipment $5,731,000 75,000 792,000 560,000 37,000 186,000 Total Utilities 481,250 Production Supervisor's Salary 450,000 School Logo (for bags) Design Costs 26,000 Packaging Cases Cost 42,000 Total Insurance 168,000 Delivery Vehicle Drivers' Wages 181,500 Depreciation: Delivery Vehicle 53,290 Property Taxes 240,000 Administrative Wages & Salaries 801,250 1% of Sales Revenue…

Answer 2

Question

Chapter 14, Problem 14.4P

(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.

Straight-line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To Identify: The face amount of the bonds.

(2)

To determine

To Identify: The selling price of the bonds.

(3)

To determine

To Identify: The term to maturity in years.

(4)

To determine

Which approach method is used in the Amortization schedule?

(5)

To determine

To Identify: The stated annual interest rate.

(6)

To determine

To Identify: The effective annual interest rate.

(7)

To determine

To Identify: The Cash interest paid over the term to maturity period.

(8)

To determine

To Identify: The total effective interest expense recorded over the term to maturity.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 14, Problem 14.4P

(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.

Straight-line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To Identify: The face amount of the bonds.

(2)

To determine

To Identify: The selling price of the bonds.

(3)

To determine

To Identify: The term to maturity in years.

(4)

To determine

Which approach method is used in the Amortization schedule?

(5)

To determine

To Identify: The stated annual interest rate.

(6)

To determine

To Identify: The effective annual interest rate.

(7)

To determine

To Identify: The Cash interest paid over the term to maturity period.

(8)

To determine

To Identify: The total effective interest expense recorded over the term to maturity.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 14, Problem 14.4P

(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.

Straight-line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To Identify: The face amount of the bonds.

(2)

To determine

To Identify: The selling price of the bonds.

(3)

To determine

To Identify: The term to maturity in years.

(4)

To determine

Which approach method is used in the Amortization schedule?

(5)

To determine

To Identify: The stated annual interest rate.

(6)

To determine

To Identify: The effective annual interest rate.

(7)

To determine

To Identify: The Cash interest paid over the term to maturity period.

(8)

To determine

To Identify: The total effective interest expense recorded over the term to maturity.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 14, Problem 14.4P

(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.

Straight-line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To Identify: The face amount of the bonds.

(2)

To determine

To Identify: The selling price of the bonds.

(3)

To determine

To Identify: The term to maturity in years.

(4)

To determine

Which approach method is used in the Amortization schedule?

(5)

To determine

To Identify: The stated annual interest rate.

(6)

To determine

To Identify: The effective annual interest rate.

(7)

To determine

To Identify: The Cash interest paid over the term to maturity period.

(8)

To determine

To Identify: The total effective interest expense recorded over the term to maturity.

Answer 6

Chapter 14, Problem 14.4P

(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.

Straight-line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To Identify: The face amount of the bonds.

Answer 7

Chapter 14, Problem 14.4P

(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.

Straight-line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To Identify: The face amount of the bonds.

Answer 8

(2)

To determine

To Identify: The selling price of the bonds.

Answer 9

(2)

To determine

To Identify: The selling price of the bonds.

Answer 10

(3)

To determine

To Identify: The term to maturity in years.

Answer 11

(3)

To determine

To Identify: The term to maturity in years.

Answer 12

(4)

To determine

Which approach method is used in the Amortization schedule?

Answer 13

(4)

To determine

Which approach method is used in the Amortization schedule?

Answer 14

(5)

To determine

To Identify: The stated annual interest rate.

Answer 15

(5)

To determine

To Identify: The stated annual interest rate.

Answer 16

(6)

To determine

To Identify: The effective annual interest rate.

Answer 17

(6)

To determine

To Identify: The effective annual interest rate.

Answer 18

(7)

To determine

To Identify: The Cash interest paid over the term to maturity period.

Answer 19

(7)

To determine

To Identify: The Cash interest paid over the term to maturity period.

Answer 20

(8)

To determine

To Identify: The total effective interest expense recorded over the term to maturity.

Answer 21

(8)

To determine

To Identify: The total effective interest expense recorded over the term to maturity.

Answer 22

Expert Solution & Answer

Answer 23

Expert Solution & Answer

Answer 24

Want to see the full answer?

Check out a sample textbook solution

See solution

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

To Identify: The selling price of the bonds.

To Identify: The term to maturity in years.

Which approach method is used in the Amortization schedule?

To Identify: The stated annual interest rate.

To Identify: The effective annual interest rate.

To Identify: The Cash interest paid over the term to maturity period.

To Identify: The total effective interest expense recorded over the term to maturity.

Want to see the full answer?

Chapter 14 Solutions