Bonds Payable: The Bonds payable is the long term liability of the issuer company and contains formal commitment to pay the interest on regular intervals and principal amount to be repaid at the time of maturity which will be fixed at the time of issuance itself. The Bonds payable is the long term liability issued by the company to finance its expansion or to finance the new project. The bonds may be issued at par or at discount or at premium depending upon the stated rate of interest on the bonds and market rate of interest persistent in the market. Each Bond is having a face value at which it is treated as liability to be paid in future. However, the carrying amount of Bonds payable in the books may differ based on bonds issued at par or at discount or at premium at the time of issue. Under Effective Interest method, the difference between the cash interest paid and interest expense of the period is computed. This difference is considered as discount or premium amortized for the period depending upon the amount of both the interest. Requirement1: The Journal entry for the issuance of bonds and payment of semi-annual interest.
Bonds Payable: The Bonds payable is the long term liability of the issuer company and contains formal commitment to pay the interest on regular intervals and principal amount to be repaid at the time of maturity which will be fixed at the time of issuance itself. The Bonds payable is the long term liability issued by the company to finance its expansion or to finance the new project. The bonds may be issued at par or at discount or at premium depending upon the stated rate of interest on the bonds and market rate of interest persistent in the market. Each Bond is having a face value at which it is treated as liability to be paid in future. However, the carrying amount of Bonds payable in the books may differ based on bonds issued at par or at discount or at premium at the time of issue. Under Effective Interest method, the difference between the cash interest paid and interest expense of the period is computed. This difference is considered as discount or premium amortized for the period depending upon the amount of both the interest. Requirement1: The Journal entry for the issuance of bonds and payment of semi-annual interest.
Definition Definition Calculates the present value of a bond's expected future periodic coupon payments. Bond valuation determines the theoretical fair value of a particular bond and helps investors estimate what rate of return they could expect. The bond's theoretical fair value is computed by discounting the future cash flows or coupon payments by an applicable discount rate.
Chapter 14, Problem E14A.30E
To determine
Bonds Payable:
The Bonds payable is the long term liability of the issuer company and contains formal commitment to pay the interest on regular intervals and principal amount to be repaid at the time of maturity which will be fixed at the time of issuance itself.
The Bonds payable is the long term liability issued by the company to finance its expansion or to finance the new project. The bonds may be issued at par or at discount or at premium depending upon the stated rate of interest on the bonds and market rate of interest persistent in the market. Each Bond is having a face value at which it is treated as liability to be paid in future. However, the carrying amount of Bonds payable in the books may differ based on bonds issued at par or at discount or at premium at the time of issue.
Under Effective Interest method, the difference between the cash interest paid and interest expense of the period is computed. This difference is considered as discount or premium amortized for the period depending upon the amount of both the interest.
Requirement1:
The Journal entry for the issuance of bonds and payment of semi-annual interest.
To determine
Requirement2:
The Journal entry for the issuance of bonds and payment of semi-annual interest.
To determine
Requirement3:
The Journal entry for the issuance of bonds and payment of semi-annual interest.
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