Explanation Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from investors to raise fund for financing the operations. Prepare journal entry to record issuance of the bonds. Date Account Titles and Explanation Debit Credit Cash $800,000 Discount on bonds payable (3) $99,698.08 Bonds payable $800,000 Paid in capital - conversion feature (balancing figure) $99,698.08 (To record issuance of bonds) Table (1) Cash is a current asset, and it is increased. Therefore, debit cash account for $800,000. Discount on bonds payable is a contra liability, and it is increased. Therefore, debit discount on bonds payable account for $99,698.08. Bonds payable is a liability, and it is increased. Therefore, credit bonds payable account for $800,000. Paid in capital – conversion feature is a component of stockholders’ equity , and it is increased. Therefore, credit paid in capital – conversion feature account for $99,698.08. Working note: (1)Calculate issue price of the bonds. Particulars Amount (A) Present value factor (B) Value of the Bonds (A × B) Present value of principal $800,000 0.376889 $301,511.20 Add: Present value of interest (2) $32,000 12.462210 $398,790.72 Selling price of the bonds $700,301...

Intermediate Accounting: Reporting and Analysis (Looseleaf)

2nd Edition

ISBN: 9781285453859

Author: WAHLEN

Publisher: Cengage

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Chapter 14, Problem 22E

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Prepare journal entry to record issuance of the bonds.

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Chapter 14, Problem 23E

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Chapter 14 Solutions

Intermediate Accounting: Reporting and Analysis (Looseleaf)

Ch. 14 - Prob. 1GI Ch. 14 - Why does issuing debt result in an income tax...Ch. 14 - What is a bond? Define face value, maturity date,...Ch. 14 - What is the difference between a mortgage bond and...Ch. 14 - Prob. 5GI Ch. 14 - Prob. 6GI Ch. 14 - Prob. 7GI Ch. 14 - Prob. 8GI Ch. 14 - Prob. 9GI Ch. 14 - Prob. 10GI

Ch. 14 - Prob. 11GI Ch. 14 - Prob. 12GI Ch. 14 - Prob. 13GI Ch. 14 - What is a call provision? Why do companies often...Ch. 14 - Prob. 15GI Ch. 14 - When do companies recognize gains and losses from...Ch. 14 - Prob. 17GI Ch. 14 - Prob. 18GI Ch. 14 - Prob. 19GI Ch. 14 - Prob. 20GI Ch. 14 - Prob. 21GI Ch. 14 - Prob. 22GI Ch. 14 - Prob. 23GI Ch. 14 - Prob. 24GI Ch. 14 - Prob. 25GI Ch. 14 - Prob. 26GI Ch. 14 - Prob. 27GI Ch. 14 - Prob. 1MC Ch. 14 - Prob. 2MC Ch. 14 - Prob. 3MC Ch. 14 - Prob. 4MC Ch. 14 - Prob. 5MC Ch. 14 - Prob. 6MC Ch. 14 - Prob. 7MC Ch. 14 - When the cash proceeds from a bond issued with...Ch. 14 - Prob. 9MC Ch. 14 - Prob. 10MC Ch. 14 - Prob. 11MC Ch. 14 - Prob. 12MC Ch. 14 - Prob. 1RE Ch. 14 - Prob. 2RE Ch. 14 - Prob. 3RE Ch. 14 - Prob. 4RE Ch. 14 - Prob. 5RE Ch. 14 - Prob. 6RE Ch. 14 - Prob. 7RE Ch. 14 - Prob. 8RE Ch. 14 - Prob. 9RE Ch. 14 - Prob. 10RE Ch. 14 - Prob. 11RE Ch. 14 - Prob. 12RE Ch. 14 - Prob. 13RE Ch. 14 - Prob. 14RE Ch. 14 - Prob. 15RE Ch. 14 - Prob. 1E Ch. 14 - Prob. 2E Ch. 14 - Prob. 3E Ch. 14 - Recording Bond Issuance On January 1, 2016, Knorr...Ch. 14 - Prob. 5E Ch. 14 - Prob. 6E Ch. 14 - Prob. 7E Ch. 14 - Prob. 8E Ch. 14 - Prob. 9E Ch. 14 - Prob. 10E Ch. 14 - Prob. 11E Ch. 14 - Prob. 12E Ch. 14 - Prob. 13E Ch. 14 - Prob. 14E Ch. 14 - Prob. 15E Ch. 14 - Prob. 16E Ch. 14 - On January 1, 2015, when its 30 par value common...Ch. 14 - Prob. 18E Ch. 14 - On January 1, 2019, Conroe Corporation sold...Ch. 14 - Prob. 20E Ch. 14 - Prob. 21E Ch. 14 - Prob. 22E Ch. 14 - Prob. 23E Ch. 14 - Prob. 24E Ch. 14 - Prob. 25E Ch. 14 - Prob. 26E Ch. 14 - Prob. 27E Ch. 14 - Prob. 28E Ch. 14 - Prob. 29E Ch. 14 - Prob. 30E Ch. 14 - Prob. 31E Ch. 14 - Prob. 1P Ch. 14 - Prob. 2P Ch. 14 - Prob. 3P Ch. 14 - Prob. 4P Ch. 14 - Prob. 5P Ch. 14 - Prob. 6P Ch. 14 - Prob. 7P Ch. 14 - Prob. 8P Ch. 14 - Prob. 9P Ch. 14 - Prob. 10P Ch. 14 - Prob. 11P Ch. 14 - Prob. 12P Ch. 14 - Prob. 13P Ch. 14 - Prob. 14P Ch. 14 - Prob. 15P Ch. 14 - Prob. 16P Ch. 14 - Prob. 1C Ch. 14 - One way for a corporation to accomplish long-term...Ch. 14 - Prob. 3C Ch. 14 - Recording Convertible Debt Zakin Co. recently...Ch. 14 - Prob. 5C Ch. 14 - Long-Term Notes Payable Business transactions...Ch. 14 - Prob. 7C Ch. 14 - Prob. 8C Ch. 14 - Prob. 9C Ch. 14 - You are an accountant for Taos Company, which has...Ch. 14 - Prob. 11C Ch. 14 - Prob. 12C Ch. 14 - Prob. 13C

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