EBK ACCOUNTING, CHAPTERS 1-13
27th Edition
ISBN: 9781337514088
Author: WARREN
Publisher: CENGAGE LEARNING - CONSIGNMENT
expand_more
expand_more
format_list_bulleted
Question
Chapter 14, Problem 4DQ
(a)
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.
Contract interest rate: It refers to the interest rate that is stated on the face of the bonds.
Market interest rate: It refers to the interest rate that the lenders expect, or demands from the borrower to part with their money as loan to them.
To identify: The amount of cash received from sales of the bond
(b)
(1)
To determine
To Identify: The amounts of face value.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
4. A corporation issues $26,000,000 of 9% bonds to
yield interest at the rate of 7%. (a) Was the amount
of cash received from the sale of the bonds greater
or less than $26,000,000? (b) Identify the following
amounts as they relate to the bond issue: (1) face
amount, (2) market or effective rate of interest,
(3) contract rate of interest, and (4) maturity amount.
sold at a
I need help with this question.
A $2,600 credit balance in the Premium on Bonds Payable account represents which of the following?
Select one:
a. An overpayment for a bond purchase
b. An underpayment for a bond purchase
c. The current amount of amortization expense
d. The unamortized amount of premium earned on a bond issue
Chapter 14 Solutions
EBK ACCOUNTING, CHAPTERS 1-13
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. 4DQCh. 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...
Ch. 14 - Alternative financing plans Frey co. is...Ch. 14 - Alternative financing plans Brower co. is...Ch. 14 - Issuing bonds at face amount On January 1, the...Ch. 14 - Issuing bonds at face amount On January 1, the...Ch. 14 - Prob. 14.3APECh. 14 - Issuing bonds at a discount On the first day of...Ch. 14 - Prob. 14.4APECh. 14 - Prob. 14.4BPECh. 14 - Prob. 14.5APECh. 14 - Prob. 14.5BPECh. 14 - Prob. 14.6APECh. 14 - Prob. 14.6BPECh. 14 - A Redemption of bonds payable A 1,500,000 bond...Ch. 14 - Redemption of bonds payable A 1,200,000 bond issue...Ch. 14 - Journalizing installment notes On the first day of...Ch. 14 - Journalizing installment notes On the first day of...Ch. 14 - Times interest earned Berry Company reported the...Ch. 14 - Times interest earned Aver ill Products Inc....Ch. 14 - Prob. 14.1EXCh. 14 - Prob. 14.2EXCh. 14 - Prob. 14.3EXCh. 14 - Bond price Stone Energy Corporation's 7.5% bonds...Ch. 14 - Entries for issuing bonds Thomson Co. products and...Ch. 14 - Prob. 14.6EXCh. 14 - Prob. 14.7EXCh. 14 - Prob. 14.8EXCh. 14 - Entries for issuing and calling bonds; gain Emil...Ch. 14 - Entries for installment note transactions On the...Ch. 14 - Entries for installment note transactions On...Ch. 14 - Entries for installment note transactions On...Ch. 14 - Reporting bonds At the beginning of the current...Ch. 14 - Times interest earned The following data were...Ch. 14 - Times interest earned Loomis, Inc. reported the...Ch. 14 - Times interest earned lacouva Company reported the...Ch. 14 - Present value of amounts due Tommy John is going...Ch. 14 - Prob. 14.18EXCh. 14 - Present value of an annuity On January 1, you win...Ch. 14 - Prob. 14.20EXCh. 14 - Prob. 14.21EXCh. 14 - Present value of bonds payable; premium Moss Co....Ch. 14 - Prob. 14.23EXCh. 14 - Amortize premium by interest method Shunda...Ch. 14 - Prob. 14.25EXCh. 14 - Prob. 14.26EXCh. 14 - Prob. 14.1APRCh. 14 - Bond discount, entries for bonds payable...Ch. 14 - Prob. 14.3APRCh. 14 - Entries for bonds payable and installment note...Ch. 14 - Bond discount, entries for bonds payable...Ch. 14 - Prob. 14.6APRCh. 14 - Effect of financing on earnings per share Three...Ch. 14 - Bond discount, entries for bonds payable...Ch. 14 - Bond premium, entries for bonds payable...Ch. 14 - Entries for bonds payable and installment note...Ch. 14 - Bond discount entries for bonds payable...Ch. 14 - Bond premium, entries for bonds payable...Ch. 14 - Prob. 14.1CPCh. 14 - Prob. 14.3CPCh. 14 - Prob. 14.4CPCh. 14 - Prob. 14.5CPCh. 14 - Prob. 14.6CPCh. 14 - Times interest earned The following financial data...
Knowledge Booster
Similar questions
- If the Bonds Payable account has a balance of $700,000 and the Discount on Bonds Payable account has a balance of $36,000, what is the carrying value of the bonds? Carrying value of the bonds $arrow_forwardThe following data relate to a $2,000,000, 8% bond issued for a selected semiannual interest period: Bond carrying amount at beginning of period $2,125,000Interest paid during period 160,000 Interest expense allocable to the period 148,750 (a) Were the bonds issued at a discount or at a premium? (b) What is the unamortized amount of the discount or premium account at the beginningof the period? (c) What account was debited to amortize the discount or premium?arrow_forwardA $291,000 bond was redeemed at 98 when the carrying amount of the bond was $286,635. What amount of gain or loss would be recorded as part of this transaction? Select the correct answer. loss on bond redemption of $4,365. gain on bond redemption of $5,820. gain on bond redemption of $1,455. loss on bond redemption of $1,455.arrow_forward
- Determine whether the following bonds payable will be issued at par value, at a premium, or at a discount. A. Evergreen company issued bonds payable that pay stated interest of 6 1/4%. On the date of issuance the market interest rate was 6 3/4% ________arrow_forwardRequired Compute the cash proceeds from bond issues under the following terms. For each case, indicate whether the bonds sold at a premium or discount. (Round your answers to nearest dollar amount.) Cash Discount or Proceeds Premium а. Pear, Inc. issued $168,000 of 10-year, 8 percent bonds at 102. b. Apple, Inc. issued $139,000 of five-year, 12 percent bonds at 97. С. Cherry Co. issued $159,000 of five-year, 6 percent bonds at 102 1/4. d. Grape, Inc. issued $70,000 of four-year, 8 percent bonds at 98.00.arrow_forwardTrue or False: The balance in the Bonds Payable account is a credit of $16,500. The balance in the Premium on Bonds Payable account is a credit of $1,000. The balance sheet will report the bond balance as $15,500.arrow_forward
- Answer full question.arrow_forwardPresent entries to record the selected transactions described below: a. Issued $2,750,000 of 10-year, 8% bonds at 97. If an amount box does not require an entry, leave it blank. b. Amortized bond discount for a full year, using the straight-line method. If an amount box does not require an entry, leave it blank. c. Called bonds at 98. Assume the bonds were carried at $2,692,250 at the time of the redemption. If an amount box does not require an entry, leave it blank.arrow_forwardMajestic Corporation holds an investment in Cromwell bonds that pays interest eachOctober 31. Majestic’s balance sheet at December 31 should reporta. interest expense.b. interest revenue.c. interest payable.d. interest receivable.arrow_forward
- compute the cash proceeds from bond issues under the following terms. for each case, indicate whether the bonds sold at a premium or discount Cash Proceeds Discount or Premium a. Pear, Inc. issued $225,000 of 10-year, 8 percent bonds at 101. b. Apple, Inc. issued $133,000 of five-year, 12 percent bonds at 98. c. Cherry Co. issued $158,000 of five-year, 6 percent bonds at 102 1/4. d. Grape, Inc. issued $58,000 of four-year, 8 percent bonds at 97.arrow_forwardABC Company issued bonds with a face amount of $1,000,000 and received $1,000,000 cash. Prepare the journal entry to record the issuance of these is. bonds. ABC Company issued bonds with a face amount of $1,000,000 and received $900,000 in cash. Prepare the Journal entry to record the issuence of these bands. ABC Company issued bonds with a face amount of $1,000,000 and received $1,200,000 in cash. Prepare the journal entry to record the issuance of these bonds.arrow_forward7.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage Learning
Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning