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. 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 a constant percentage rate. To Prepare: The journal entry to record the issuance of bonds by G Group on June 30, 2016.

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Answer 1

Question

Chapter 14, Problem 14.6E

(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.

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 a constant percentage rate.

To Prepare: The journal entry to record the issuance of bonds by G Group on June 30, 2016.

(2)

To determine

To Prepare: The journal entry to record interest (at the effective rate) on December 31, 2016.

(3)

To determine

To Prepare: The journal entry to record interest (at the effective rate) on June 30, 2019.

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Bella Brands operates with two divisions, Aftershave and Deodorant. The Aftershave Division produces a chemical that the Deodorant Division also uses. The Aftershave Division also sells this chemical to other firms for $10 per ounce. The cost information for the Aftershave Division is as follows: Variable costs per ounce $ 6.00 Fixed costs per ounce $ 15.00 Monthly production capacity 30,000 ounces If the Aftershave Division is not operating at full capacity and is able to supply the Deodorant Division with its needs for the chemical, what is the minimum transfer price that the Aftershave Division will accept? Multiple Choice None of the choices is correct. $10.00 per ounce $6.00 per ounce $15.00 per ounce $3.00 per ounce

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Bella Brands operates with two divisions, Aftershave and Deodorant. The Aftershave Division produces a chemical that the Deodorant Division also uses. The Aftershave Division also sells this chemical to other firms for $27 per ounce. The cost information for the Aftershave Division is as follows: Variable costs per ounce $ 6.00 Fixed costs per ounce $ 15.00 Monthly production capacity 30,000 ounces If the Aftershave Division is operating at full capacity and can sell all of the chemical that it can produce, what is the minimum transfer price that the Aftershave Division will accept? Multiple Choice None of the choices is correct. $6.00 per ounce $21.00 per ounce $15.00 per ounce $27.00 per ounce

Answer 2

Question

Chapter 14, Problem 14.6E

(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.

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 a constant percentage rate.

To Prepare: The journal entry to record the issuance of bonds by G Group on June 30, 2016.

(2)

To determine

To Prepare: The journal entry to record interest (at the effective rate) on December 31, 2016.

(3)

To determine

To Prepare: The journal entry to record interest (at the effective rate) on June 30, 2019.

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Answer 3

Question

Chapter 14, Problem 14.6E

(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.

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 a constant percentage rate.

To Prepare: The journal entry to record the issuance of bonds by G Group on June 30, 2016.

(2)

To determine

To Prepare: The journal entry to record interest (at the effective rate) on December 31, 2016.

(3)

To determine

To Prepare: The journal entry to record interest (at the effective rate) on June 30, 2019.

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Answer 4

Question

Chapter 14, Problem 14.6E

(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.

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 a constant percentage rate.

To Prepare: The journal entry to record the issuance of bonds by G Group on June 30, 2016.

(2)

To determine

To Prepare: The journal entry to record interest (at the effective rate) on December 31, 2016.

(3)

To determine

To Prepare: The journal entry to record interest (at the effective rate) on June 30, 2019.

Expert Solution & Answer

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Answer 5

Chapter 14, Problem 14.6E

(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.

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 a constant percentage rate.

To Prepare: The journal entry to record the issuance of bonds by G Group on June 30, 2016.

(2)

To determine

To Prepare: The journal entry to record interest (at the effective rate) on December 31, 2016.

(3)

To determine

To Prepare: The journal entry to record interest (at the effective rate) on June 30, 2019.

Answer 6

Chapter 14, Problem 14.6E

(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.

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 a constant percentage rate.

To Prepare: The journal entry to record the issuance of bonds by G Group on June 30, 2016.

Answer 7

Chapter 14, Problem 14.6E

(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.

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 a constant percentage rate.

To Prepare: The journal entry to record the issuance of bonds by G Group on June 30, 2016.

Answer 8

(2)

To determine

To Prepare: The journal entry to record interest (at the effective rate) on December 31, 2016.

Answer 9

(2)

To determine

To Prepare: The journal entry to record interest (at the effective rate) on December 31, 2016.

Answer 10

(3)

To determine

To Prepare: The journal entry to record interest (at the effective rate) on June 30, 2019.

Answer 11

(3)

To determine

To Prepare: The journal entry to record interest (at the effective rate) on June 30, 2019.

Answer 12

Expert Solution & Answer

Answer 13

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Answer 14

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Answer 15

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 Prepare: The journal entry to record interest (at the effective rate) on December 31, 2016.

To Prepare: The journal entry to record interest (at the effective rate) on June 30, 2019.

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