The treatment of bond costs under IFRS, and the discount or premium on the bond. Given information: Company issued bonds worth $900,000. Term period for conversion is 5 years Interest is payable semi-annually each June 30 and December 31. Cash received at the time of issuance is $863,825. Bond issue costs are $59,000. Effective rate of interest is 7.742%.

Question

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Answer 1

Question

Chapter 14, Problem 14.5P

a.

To determine

The treatment of bond costs under IFRS, and the discount or premium on the bond.

Given information:

Company issued bonds worth $900,000.

Term period for conversion is 5 years

Interest is payable semi-annually each June 30 and December 31.

Cash received at the time of issuance is $863,825.

Bond issue costs are $59,000.

Effective rate of interest is 7.742%.

b.

To determine

To prepare: The amortization table for the bond issue using effective rate of interest.

c.

To determine

To prepare: The journal for recording the required entries on the date of issue and on the first two interest dates in 2016 of June 30 and December 31.

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Answer 2

Question

Chapter 14, Problem 14.5P

a.

To determine

The treatment of bond costs under IFRS, and the discount or premium on the bond.

Given information:

Company issued bonds worth $900,000.

Term period for conversion is 5 years

Interest is payable semi-annually each June 30 and December 31.

Cash received at the time of issuance is $863,825.

Bond issue costs are $59,000.

Effective rate of interest is 7.742%.

b.

To determine

To prepare: The amortization table for the bond issue using effective rate of interest.

c.

To determine

To prepare: The journal for recording the required entries on the date of issue and on the first two interest dates in 2016 of June 30 and December 31.

Expert Solution & Answer

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Answer 3

Question

Chapter 14, Problem 14.5P

a.

To determine

The treatment of bond costs under IFRS, and the discount or premium on the bond.

Given information:

Company issued bonds worth $900,000.

Term period for conversion is 5 years

Interest is payable semi-annually each June 30 and December 31.

Cash received at the time of issuance is $863,825.

Bond issue costs are $59,000.

Effective rate of interest is 7.742%.

b.

To determine

To prepare: The amortization table for the bond issue using effective rate of interest.

c.

To determine

To prepare: The journal for recording the required entries on the date of issue and on the first two interest dates in 2016 of June 30 and December 31.

Expert Solution & Answer

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Answer 4

Question

Chapter 14, Problem 14.5P

a.

To determine

The treatment of bond costs under IFRS, and the discount or premium on the bond.

Given information:

Company issued bonds worth $900,000.

Term period for conversion is 5 years

Interest is payable semi-annually each June 30 and December 31.

Cash received at the time of issuance is $863,825.

Bond issue costs are $59,000.

Effective rate of interest is 7.742%.

b.

To determine

To prepare: The amortization table for the bond issue using effective rate of interest.

c.

To determine

To prepare: The journal for recording the required entries on the date of issue and on the first two interest dates in 2016 of June 30 and December 31.

Expert Solution & Answer

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Answer 5

Chapter 14, Problem 14.5P

a.

To determine

The treatment of bond costs under IFRS, and the discount or premium on the bond.

Given information:

Company issued bonds worth $900,000.

Term period for conversion is 5 years

Interest is payable semi-annually each June 30 and December 31.

Cash received at the time of issuance is $863,825.

Bond issue costs are $59,000.

Effective rate of interest is 7.742%.

b.

To determine

To prepare: The amortization table for the bond issue using effective rate of interest.

c.

To determine

To prepare: The journal for recording the required entries on the date of issue and on the first two interest dates in 2016 of June 30 and December 31.

Answer 6

Chapter 14, Problem 14.5P

a.

To determine

The treatment of bond costs under IFRS, and the discount or premium on the bond.

Given information:

Company issued bonds worth $900,000.

Term period for conversion is 5 years

Interest is payable semi-annually each June 30 and December 31.

Cash received at the time of issuance is $863,825.

Bond issue costs are $59,000.

Effective rate of interest is 7.742%.

Answer 7

Chapter 14, Problem 14.5P

a.

To determine

The treatment of bond costs under IFRS, and the discount or premium on the bond.

Given information:

Company issued bonds worth $900,000.

Term period for conversion is 5 years

Interest is payable semi-annually each June 30 and December 31.

Cash received at the time of issuance is $863,825.

Bond issue costs are $59,000.

Effective rate of interest is 7.742%.

Answer 8

b.

To determine

To prepare: The amortization table for the bond issue using effective rate of interest.

Answer 9

b.

To determine

To prepare: The amortization table for the bond issue using effective rate of interest.

Answer 10

c.

To determine

To prepare: The journal for recording the required entries on the date of issue and on the first two interest dates in 2016 of June 30 and December 31.

Answer 11

c.

To determine

To prepare: The journal for recording the required entries on the date of issue and on the first two interest dates in 2016 of June 30 and December 31.

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

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...

To prepare: The amortization table for the bond issue using effective rate of interest.

To prepare: The journal for recording the required entries on the date of issue and on the first two interest dates in 2016 of June 30 and December 31.

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Chapter 14 Solutions