Videos
Issue price of Bonds:
The Bonds issuance shall be done at the price which is equal to present values of all the
Bonds Issuance:
The bonds issuance by the company is a source of long term financing and is issued at a discount or premium depending the prevailing market rate of interest and stated rate of interest on bonds. When the stated rate of interest is higher than the market rate of interest, then the investors will be ready to invest only in the situation when the bonds are issued at premium. This premium on bonds issue shall be treated as income by deducting the amortized portion from the cash interest paid to arrive at the interest expense of the period.When the market rate of interest is higher than stated rate of interest, then the bonds shall be issued at discount, which shall be kept as unamortized expenses in
However, when the market rate of interest is equal to stated rate of interest then the bonds are issued at par value.
The determination of issue price of bonds when the market rate of interest is 8%.
The
The determination of issue price of bonds when the market rate of interest is 10%.
The Journal entry for the issuance of bonds.
The determination of issue price of bonds when the market rate of interest is 12%.
The Journal entry for the issuance of bonds.
Want to see the full answer?
Check out a sample textbook solution
Chapter 14 Solutions
FUNDAMENTAL ACCT.PRIN.-CONNECT ACCESS
- Please give me answer general accounting questionarrow_forwardBon Jovi Sports Ltd. manufactures athletic gear. One of its products is a cycling helmet that requires specialized plastic. During the quarter ending September 30, the company manufactured 4,500 helmets, using 2,500 kilograms of plastic. The plastic cost the company $16,250. According to the standard cost card, each helmet should require 0.55 kilograms of plastic at a cost of $6.80 per kilogram. Required: 1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 4,500 helmets? 2. What is the standard materials cost allowed (SQ × SP) to make 4,500 helmets? 3. What is the material's spending variance? 4. What is the material's price variance and the material's quantity variance?arrow_forwardLangford Corporation provided the following financial data: • Net Income = $27,600 Assets at the Beginning of the Year = $198,000 = Assets at the End of the Year = $242,000 Find the return on assets (ROA) in percentage.arrow_forward
- Nonearrow_forwardWhat is the actual total direct materials cost for the current period of this accounting question?arrow_forwardHonda Company had sales of $165,000, sales discounts of $4,200, and sales returns of $5,300. Honda Company's net sales equal: A. $172,500 B. $165,000 C. $155,500 D. $9,500 E. $160,800arrow_forward
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education