Amortization of Bond Discount: The company issues bond when it requires financing its project for a long term with a specified rate of interest payable at regular intervals or semi-annual or annual basis. The issuance of bond at a price lower than the par value or face value of the bond indicates that bonds are issued at a discount when the interest rate stated is comparatively less than the market interest rates by which the investors earn a good return on their investment. In such a scenario, the discount amount which is the difference between the bond par value and the amount paid by the investors is recorded in a contra liability amount and the amount of reduced payment after discount is amortized over the term of the bonds. Requirement 1a: To discuss: The entry to record the issuance of 10% five year bonds in the books of Sylvestor Company as on December 31 st 2016.

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Answer 1

Question

Chapter 14, Problem 7QS

To determine

Concept Introduction:

Amortization of Bond Discount:

The company issues bond when it requires financing its project for a long term with a specified rate of interest payable at regular intervals or semi-annual or annual basis.

The issuance of bond at a price lower than the par value or face value of the bond indicates that bonds are issued at a discount when the interest rate stated is comparatively less than the market interest rates by which the investors earn a good return on their investment. In such a scenario, the discount amount which is the difference between the bond par value and the amount paid by the investors is recorded in a contra liability amount and the amount of reduced payment after discount is amortized over the term of the bonds.

Requirement 1a:

To discuss:

The entry to record the issuance of 10% five year bonds in the books of Sylvestor Company as on December 31^st 2016.

To determine

Requirement 1b:

To discuss:

The entry to record first semi-annual interest payment of Sylvestor Company due on June 30^th 2017.

To determine

Requirement 1c:

To discuss:

The entry to record the second interest payment on December 30^th 2017 in the books of Sylvestor Company that pays interest on semi-annual basis.

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Answer 2

Question

Chapter 14, Problem 7QS

To determine

Concept Introduction:

Amortization of Bond Discount:

The company issues bond when it requires financing its project for a long term with a specified rate of interest payable at regular intervals or semi-annual or annual basis.

The issuance of bond at a price lower than the par value or face value of the bond indicates that bonds are issued at a discount when the interest rate stated is comparatively less than the market interest rates by which the investors earn a good return on their investment. In such a scenario, the discount amount which is the difference between the bond par value and the amount paid by the investors is recorded in a contra liability amount and the amount of reduced payment after discount is amortized over the term of the bonds.

Requirement 1a:

To discuss:

The entry to record the issuance of 10% five year bonds in the books of Sylvestor Company as on December 31^st 2016.

To determine

Requirement 1b:

To discuss:

The entry to record first semi-annual interest payment of Sylvestor Company due on June 30^th 2017.

To determine

Requirement 1c:

To discuss:

The entry to record the second interest payment on December 30^th 2017 in the books of Sylvestor Company that pays interest on semi-annual basis.

Expert Solution & Answer

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Answer 3

Question

Chapter 14, Problem 7QS

To determine

Concept Introduction:

Amortization of Bond Discount:

The company issues bond when it requires financing its project for a long term with a specified rate of interest payable at regular intervals or semi-annual or annual basis.

The issuance of bond at a price lower than the par value or face value of the bond indicates that bonds are issued at a discount when the interest rate stated is comparatively less than the market interest rates by which the investors earn a good return on their investment. In such a scenario, the discount amount which is the difference between the bond par value and the amount paid by the investors is recorded in a contra liability amount and the amount of reduced payment after discount is amortized over the term of the bonds.

Requirement 1a:

To discuss:

The entry to record the issuance of 10% five year bonds in the books of Sylvestor Company as on December 31^st 2016.

To determine

Requirement 1b:

To discuss:

The entry to record first semi-annual interest payment of Sylvestor Company due on June 30^th 2017.

To determine

Requirement 1c:

To discuss:

The entry to record the second interest payment on December 30^th 2017 in the books of Sylvestor Company that pays interest on semi-annual basis.

Expert Solution & Answer

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Answer 4

Question

Chapter 14, Problem 7QS

To determine

Concept Introduction:

Amortization of Bond Discount:

The company issues bond when it requires financing its project for a long term with a specified rate of interest payable at regular intervals or semi-annual or annual basis.

The issuance of bond at a price lower than the par value or face value of the bond indicates that bonds are issued at a discount when the interest rate stated is comparatively less than the market interest rates by which the investors earn a good return on their investment. In such a scenario, the discount amount which is the difference between the bond par value and the amount paid by the investors is recorded in a contra liability amount and the amount of reduced payment after discount is amortized over the term of the bonds.

Requirement 1a:

To discuss:

The entry to record the issuance of 10% five year bonds in the books of Sylvestor Company as on December 31^st 2016.

To determine

Requirement 1b:

To discuss:

The entry to record first semi-annual interest payment of Sylvestor Company due on June 30^th 2017.

To determine

Requirement 1c:

To discuss:

The entry to record the second interest payment on December 30^th 2017 in the books of Sylvestor Company that pays interest on semi-annual basis.

Expert Solution & Answer

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Answer 5

Chapter 14, Problem 7QS

To determine

Concept Introduction:

Amortization of Bond Discount:

The company issues bond when it requires financing its project for a long term with a specified rate of interest payable at regular intervals or semi-annual or annual basis.

The issuance of bond at a price lower than the par value or face value of the bond indicates that bonds are issued at a discount when the interest rate stated is comparatively less than the market interest rates by which the investors earn a good return on their investment. In such a scenario, the discount amount which is the difference between the bond par value and the amount paid by the investors is recorded in a contra liability amount and the amount of reduced payment after discount is amortized over the term of the bonds.

Requirement 1a:

To discuss:

The entry to record the issuance of 10% five year bonds in the books of Sylvestor Company as on December 31^st 2016.

To determine

Requirement 1b:

To discuss:

The entry to record first semi-annual interest payment of Sylvestor Company due on June 30^th 2017.

To determine

Requirement 1c:

To discuss:

The entry to record the second interest payment on December 30^th 2017 in the books of Sylvestor Company that pays interest on semi-annual basis.

Answer 6

Chapter 14, Problem 7QS

To determine

Concept Introduction:

Amortization of Bond Discount:

The company issues bond when it requires financing its project for a long term with a specified rate of interest payable at regular intervals or semi-annual or annual basis.

The issuance of bond at a price lower than the par value or face value of the bond indicates that bonds are issued at a discount when the interest rate stated is comparatively less than the market interest rates by which the investors earn a good return on their investment. In such a scenario, the discount amount which is the difference between the bond par value and the amount paid by the investors is recorded in a contra liability amount and the amount of reduced payment after discount is amortized over the term of the bonds.

Requirement 1a:

To discuss:

The entry to record the issuance of 10% five year bonds in the books of Sylvestor Company as on December 31^st 2016.

Answer 7

Chapter 14, Problem 7QS

To determine

Concept Introduction:

Amortization of Bond Discount:

The company issues bond when it requires financing its project for a long term with a specified rate of interest payable at regular intervals or semi-annual or annual basis.

The issuance of bond at a price lower than the par value or face value of the bond indicates that bonds are issued at a discount when the interest rate stated is comparatively less than the market interest rates by which the investors earn a good return on their investment. In such a scenario, the discount amount which is the difference between the bond par value and the amount paid by the investors is recorded in a contra liability amount and the amount of reduced payment after discount is amortized over the term of the bonds.

Requirement 1a:

To discuss:

The entry to record the issuance of 10% five year bonds in the books of Sylvestor Company as on December 31^st 2016.

Answer 8

To determine

Requirement 1b:

To discuss:

The entry to record first semi-annual interest payment of Sylvestor Company due on June 30^th 2017.

Answer 9

To determine

Requirement 1b:

To discuss:

The entry to record first semi-annual interest payment of Sylvestor Company due on June 30^th 2017.

Answer 10

To determine

Requirement 1c:

To discuss:

The entry to record the second interest payment on December 30^th 2017 in the books of Sylvestor Company that pays interest on semi-annual basis.

Answer 11

To determine

Requirement 1c:

To discuss:

The entry to record the second interest payment on December 30^th 2017 in the books of Sylvestor Company that pays interest on semi-annual basis.

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 - Prob. 8DQ Ch. 14 - Prob. 9DQ Ch. 14 - Prob. 10DQ

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Requirement 1b:

To discuss:

The entry to record first semi-annual interest payment of Sylvestor Company due on June 30^th 2017.

Requirement 1c:

To discuss:

The entry to record the second interest payment on December 30^th 2017 in the books of Sylvestor Company that pays interest on semi-annual basis.

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Chapter 14 Solutions

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Requirement 1b: To discuss: The entry to record first semi-annual interest payment of Sylvestor Company due on June 30th 2017.

Requirement 1c: To discuss: The entry to record the second interest payment on December 30th 2017 in the books of Sylvestor Company that pays interest on semi-annual basis.

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Chapter 14 Solutions

Requirement 1b:

To discuss:

The entry to record first semi-annual interest payment of Sylvestor Company due on June 30^th 2017.

Requirement 1c:

To discuss:

The entry to record the second interest payment on December 30^th 2017 in the books of Sylvestor Company that pays interest on semi-annual basis.