Bonds Issuance: The Bonds issuance by the company is a source of long term financing and is issued at a par value when the prevailing market rate of interest and stated rate of interest on bonds is equal. In such scenario, the investors are getting the same returns when the investing in bonds as they are getting from the investment made in market. The Journal entry for the issuance of bonds.

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Answer 1

Question

Chapter 14, Problem 2E

Sub Part-1

To determine

Bonds Issuance:

The Bonds issuance by the company is a source of long term financing and is issued at a par value when the prevailing market rate of interest and stated rate of interest on bonds is equal. In such scenario, the investors are getting the same returns when the investing in bonds as they are getting from the investment made in market.

The Journal entry for the issuance of bonds.

Sub Part-2

To determine

Accounting treatment of interest payment:

The Accounting entry required to be passed at each interest period is debiting the total interest expense and credit being made to the cash account for cash interest paid.

The Journal entries for two interest payments.

Sub Part3.

To determine

Maturity of Bonds:

The bonds issued shall be repaid at the end of contracted life of the bonds under which the bonds payable shall be debited to Bonds payable and the payment need to be credited to Cash account as the cash is paid out for redemption.

The Journal entry for the maturity of bonds payable.

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Answer 2

Question

Chapter 14, Problem 2E

Sub Part-1

To determine

Bonds Issuance:

The Bonds issuance by the company is a source of long term financing and is issued at a par value when the prevailing market rate of interest and stated rate of interest on bonds is equal. In such scenario, the investors are getting the same returns when the investing in bonds as they are getting from the investment made in market.

The Journal entry for the issuance of bonds.

Sub Part-2

To determine

Accounting treatment of interest payment:

The Accounting entry required to be passed at each interest period is debiting the total interest expense and credit being made to the cash account for cash interest paid.

The Journal entries for two interest payments.

Sub Part3.

To determine

Maturity of Bonds:

The bonds issued shall be repaid at the end of contracted life of the bonds under which the bonds payable shall be debited to Bonds payable and the payment need to be credited to Cash account as the cash is paid out for redemption.

The Journal entry for the maturity of bonds payable.

Expert Solution & Answer

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Answer 3

Question

Chapter 14, Problem 2E

Sub Part-1

To determine

Bonds Issuance:

The Bonds issuance by the company is a source of long term financing and is issued at a par value when the prevailing market rate of interest and stated rate of interest on bonds is equal. In such scenario, the investors are getting the same returns when the investing in bonds as they are getting from the investment made in market.

The Journal entry for the issuance of bonds.

Sub Part-2

To determine

Accounting treatment of interest payment:

The Accounting entry required to be passed at each interest period is debiting the total interest expense and credit being made to the cash account for cash interest paid.

The Journal entries for two interest payments.

Sub Part3.

To determine

Maturity of Bonds:

The bonds issued shall be repaid at the end of contracted life of the bonds under which the bonds payable shall be debited to Bonds payable and the payment need to be credited to Cash account as the cash is paid out for redemption.

The Journal entry for the maturity of bonds payable.

Expert Solution & Answer

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Answer 4

Question

Chapter 14, Problem 2E

Sub Part-1

To determine

Bonds Issuance:

The Bonds issuance by the company is a source of long term financing and is issued at a par value when the prevailing market rate of interest and stated rate of interest on bonds is equal. In such scenario, the investors are getting the same returns when the investing in bonds as they are getting from the investment made in market.

The Journal entry for the issuance of bonds.

Sub Part-2

To determine

Accounting treatment of interest payment:

The Accounting entry required to be passed at each interest period is debiting the total interest expense and credit being made to the cash account for cash interest paid.

The Journal entries for two interest payments.

Sub Part3.

To determine

Maturity of Bonds:

The bonds issued shall be repaid at the end of contracted life of the bonds under which the bonds payable shall be debited to Bonds payable and the payment need to be credited to Cash account as the cash is paid out for redemption.

The Journal entry for the maturity of bonds payable.

Expert Solution & Answer

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Answer 5

Chapter 14, Problem 2E

Sub Part-1

To determine

Bonds Issuance:

The Bonds issuance by the company is a source of long term financing and is issued at a par value when the prevailing market rate of interest and stated rate of interest on bonds is equal. In such scenario, the investors are getting the same returns when the investing in bonds as they are getting from the investment made in market.

The Journal entry for the issuance of bonds.

Sub Part-2

To determine

Accounting treatment of interest payment:

The Accounting entry required to be passed at each interest period is debiting the total interest expense and credit being made to the cash account for cash interest paid.

The Journal entries for two interest payments.

Sub Part3.

To determine

Maturity of Bonds:

The bonds issued shall be repaid at the end of contracted life of the bonds under which the bonds payable shall be debited to Bonds payable and the payment need to be credited to Cash account as the cash is paid out for redemption.

The Journal entry for the maturity of bonds payable.

Answer 6

Chapter 14, Problem 2E

Sub Part-1

To determine

Bonds Issuance:

The Bonds issuance by the company is a source of long term financing and is issued at a par value when the prevailing market rate of interest and stated rate of interest on bonds is equal. In such scenario, the investors are getting the same returns when the investing in bonds as they are getting from the investment made in market.

The Journal entry for the issuance of bonds.

Answer 7

Chapter 14, Problem 2E

Sub Part-1

To determine

Bonds Issuance:

The Bonds issuance by the company is a source of long term financing and is issued at a par value when the prevailing market rate of interest and stated rate of interest on bonds is equal. In such scenario, the investors are getting the same returns when the investing in bonds as they are getting from the investment made in market.

The Journal entry for the issuance of bonds.

Answer 8

Sub Part-2

To determine

Accounting treatment of interest payment:

The Accounting entry required to be passed at each interest period is debiting the total interest expense and credit being made to the cash account for cash interest paid.

The Journal entries for two interest payments.

Answer 9

Sub Part-2

To determine

Accounting treatment of interest payment:

The Accounting entry required to be passed at each interest period is debiting the total interest expense and credit being made to the cash account for cash interest paid.

The Journal entries for two interest payments.

Answer 10

Sub Part3.

To determine

Maturity of Bonds:

The bonds issued shall be repaid at the end of contracted life of the bonds under which the bonds payable shall be debited to Bonds payable and the payment need to be credited to Cash account as the cash is paid out for redemption.

The Journal entry for the maturity of bonds payable.

Answer 11

Sub Part3.

To determine

Maturity of Bonds:

The bonds issued shall be repaid at the end of contracted life of the bonds under which the bonds payable shall be debited to Bonds payable and the payment need to be credited to Cash account as the cash is paid out for redemption.

The Journal entry for the maturity of bonds payable.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 14 - Prob. 1DQ Ch. 14 - Prob. 2DQ Ch. 14 - Prob. 3DQ Ch. 14 - Prob. 4DQ Ch. 14 - Prob. 5DQ Ch. 14 - Prob. 6DQ Ch. 14 - Prob. 7DQ Ch. 14 - Explain the concept of accrued interest on bonds...Ch. 14 - Prob. 9DQ Ch. 14 - Prob. 10DQ

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Accounting treatment of interest payment:

The Accounting entry required to be passed at each interest period is debiting the total interest expense and credit being made to the cash account for cash interest paid.

The Journal entries for two interest payments.

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Chapter 14 Solutions

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Accounting treatment of interest payment: The Accounting entry required to be passed at each interest period is debiting the total interest expense and credit being made to the cash account for cash interest paid. The Journal entries for two interest payments.

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Chapter 14 Solutions

Accounting treatment of interest payment:

The Accounting entry required to be passed at each interest period is debiting the total interest expense and credit being made to the cash account for cash interest paid.

The Journal entries for two interest payments.