Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations. Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations. Discount on bonds payable: It occurs when the bonds are issued at a low price than the face value. To prepare: Journal entry to record issuance of the bonds.

Question

Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Chin Company issued $29,100,000 of five-year, 10% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 11%, resulting in Chin receiving cash of $28,003,265. a. Journalize the entries to record the following: Issuance of the bonds. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) If an amount box does not require an entry, leave it blank. b. Determine the amount of the bond interest expense for the first year.

Answer 1

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Chapter 14, Problem 14.6EX

a (1)

To determine

Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.

Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations.

Discount on bonds payable: It occurs when the bonds are issued at a low price than the face value.

To prepare: Journal entry to record issuance of the bonds.

2.

To determine

To prepare: Journal entry to record first interest payment and amortization of discount on bonds.

3.

To determine

To prepare: Journal entry to record second interest payment and amortization of discount on bonds.

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Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Chin Company issued $29,100,000 of five-year, 10% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 11%, resulting in Chin receiving cash of $28,003,265. a. Journalize the entries to record the following: Issuance of the bonds. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) If an amount box does not require an entry, leave it blank. b. Determine the amount of the bond interest expense for the first year.

How do I complete the journal entry?

Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Chin Company issued $28,200,000 of five-year, 6% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 7%, resulting in Chin receiving cash of $27,027,396. a. Journalize the entries to record the following: Issuance of the bonds. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) If an amount box does not require an entry, leave it blank. 1. Cash fill in the blank fill in the blank Discount on Bonds Payable fill in the blank fill in the blank Bonds Payable fill in the blank fill in the…

Answer 2

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Chapter 14, Problem 14.6EX

a (1)

To determine

Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.

Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations.

Discount on bonds payable: It occurs when the bonds are issued at a low price than the face value.

To prepare: Journal entry to record issuance of the bonds.

2.

To determine

To prepare: Journal entry to record first interest payment and amortization of discount on bonds.

3.

To determine

To prepare: Journal entry to record second interest payment and amortization of discount on bonds.

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Answer 3

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Chapter 14, Problem 14.6EX

a (1)

To determine

Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.

Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations.

Discount on bonds payable: It occurs when the bonds are issued at a low price than the face value.

To prepare: Journal entry to record issuance of the bonds.

2.

To determine

To prepare: Journal entry to record first interest payment and amortization of discount on bonds.

3.

To determine

To prepare: Journal entry to record second interest payment and amortization of discount on bonds.

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Answer 4

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Chapter 14, Problem 14.6EX

a (1)

To determine

Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.

Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations.

Discount on bonds payable: It occurs when the bonds are issued at a low price than the face value.

To prepare: Journal entry to record issuance of the bonds.

2.

To determine

To prepare: Journal entry to record first interest payment and amortization of discount on bonds.

3.

To determine

To prepare: Journal entry to record second interest payment and amortization of discount on bonds.

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Answer 5

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Answer 6

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Answer 7

Chapter 14, Problem 14.6EX

a (1)

To determine

Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.

Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations.

Discount on bonds payable: It occurs when the bonds are issued at a low price than the face value.

To prepare: Journal entry to record issuance of the bonds.

2.

To determine

To prepare: Journal entry to record first interest payment and amortization of discount on bonds.

3.

To determine

To prepare: Journal entry to record second interest payment and amortization of discount on bonds.

Answer 8

Chapter 14, Problem 14.6EX

a (1)

To determine

Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.

Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations.

Discount on bonds payable: It occurs when the bonds are issued at a low price than the face value.

To prepare: Journal entry to record issuance of the bonds.

Answer 9

Chapter 14, Problem 14.6EX

a (1)

To determine

Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.

Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations.

Discount on bonds payable: It occurs when the bonds are issued at a low price than the face value.

To prepare: Journal entry to record issuance of the bonds.

Answer 10

2.

To determine

To prepare: Journal entry to record first interest payment and amortization of discount on bonds.

Answer 11

2.

To determine

To prepare: Journal entry to record first interest payment and amortization of discount on bonds.

Answer 12

3.

To determine

To prepare: Journal entry to record second interest payment and amortization of discount on bonds.

Answer 13

3.

To determine

To prepare: Journal entry to record second interest payment and amortization of discount on bonds.

Answer 14

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Answer 25

Ch. 14 - Describe the two distinct obligations incurred by...Ch. 14 - Explain the meaning of each of the following terms...Ch. 14 - If you asked your broker to buy you a 12% bond...Ch. 14 - Prob. 4DQ Ch. 14 - If bonds issued by a corporation are sold at...Ch. 14 - The following data relate to a 2,000,000, 8% bond...Ch. 14 - Bonds Payable has a balance of 5,000,000, and...Ch. 14 - What is a mortgage note?Ch. 14 - Fleeson Company needs additional funds to purchase...Ch. 14 - In what section of the balance sheet would a bond...

Solution Summary: The author explains that bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.

To prepare: Journal entry to record first interest payment and amortization of discount on bonds.

To prepare: Journal entry to record second interest payment and amortization of discount on bonds.

Chapter 14 Solutions