Bond: Bond is a financial instrument which generates the fixed income to the investors within a specified period of time. The income generated on the bonds is known as interest amount. Amortization of Bonds: Bonds issued at discount or premium then the discounted or premium value is amortized from the contractual interest over a period of time and comes under the income statement. Straight-line method of amortization of bonds: Straight-line method of amortization of bonds refers to set off an equal amount of discounted or premium amounts from the income statement over interest period. Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts. Accounting rules for journal entries: To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains. To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains. To Prepare: The journal entry for the issuance of bond.

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Answer 1

Question

Chapter 15, Problem 15.6AP

(a)

To determine

Bond: Bond is a financial instrument which generates the fixed income to the investors within a specified period of time. The income generated on the bonds is known as interest amount.

Amortization of Bonds: Bonds issued at discount or premium then the discounted or premium value is amortized from the contractual interest over a period of time and comes under the income statement.

Straight-line method of amortization of bonds: Straight-line method of amortization of bonds refers to set off an equal amount of discounted or premium amounts from the income statement over interest period.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To Prepare: The journal entry for the issuance of bond.

(b)

To determine

To Prepare: The schedule the bond premium amortization for first 4 periods.

(c)

To determine

To Prepare: The journal entry for the interest and amortization of the premium.

(d)

To determine

To Prepare: the balance sheet presentation of the bond liability.

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Answer 2

Question

Chapter 15, Problem 15.6AP

(a)

To determine

Bond: Bond is a financial instrument which generates the fixed income to the investors within a specified period of time. The income generated on the bonds is known as interest amount.

Amortization of Bonds: Bonds issued at discount or premium then the discounted or premium value is amortized from the contractual interest over a period of time and comes under the income statement.

Straight-line method of amortization of bonds: Straight-line method of amortization of bonds refers to set off an equal amount of discounted or premium amounts from the income statement over interest period.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To Prepare: The journal entry for the issuance of bond.

(b)

To determine

To Prepare: The schedule the bond premium amortization for first 4 periods.

(c)

To determine

To Prepare: The journal entry for the interest and amortization of the premium.

(d)

To determine

To Prepare: the balance sheet presentation of the bond liability.

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Answer 3

Question

Chapter 15, Problem 15.6AP

(a)

To determine

Bond: Bond is a financial instrument which generates the fixed income to the investors within a specified period of time. The income generated on the bonds is known as interest amount.

Amortization of Bonds: Bonds issued at discount or premium then the discounted or premium value is amortized from the contractual interest over a period of time and comes under the income statement.

Straight-line method of amortization of bonds: Straight-line method of amortization of bonds refers to set off an equal amount of discounted or premium amounts from the income statement over interest period.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To Prepare: The journal entry for the issuance of bond.

(b)

To determine

To Prepare: The schedule the bond premium amortization for first 4 periods.

(c)

To determine

To Prepare: The journal entry for the interest and amortization of the premium.

(d)

To determine

To Prepare: the balance sheet presentation of the bond liability.

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Answer 4

Question

Chapter 15, Problem 15.6AP

(a)

To determine

Bond: Bond is a financial instrument which generates the fixed income to the investors within a specified period of time. The income generated on the bonds is known as interest amount.

Amortization of Bonds: Bonds issued at discount or premium then the discounted or premium value is amortized from the contractual interest over a period of time and comes under the income statement.

Straight-line method of amortization of bonds: Straight-line method of amortization of bonds refers to set off an equal amount of discounted or premium amounts from the income statement over interest period.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To Prepare: The journal entry for the issuance of bond.

(b)

To determine

To Prepare: The schedule the bond premium amortization for first 4 periods.

(c)

To determine

To Prepare: The journal entry for the interest and amortization of the premium.

(d)

To determine

To Prepare: the balance sheet presentation of the bond liability.

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Answer 5

Chapter 15, Problem 15.6AP

(a)

To determine

Bond: Bond is a financial instrument which generates the fixed income to the investors within a specified period of time. The income generated on the bonds is known as interest amount.

Amortization of Bonds: Bonds issued at discount or premium then the discounted or premium value is amortized from the contractual interest over a period of time and comes under the income statement.

Straight-line method of amortization of bonds: Straight-line method of amortization of bonds refers to set off an equal amount of discounted or premium amounts from the income statement over interest period.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To Prepare: The journal entry for the issuance of bond.

(b)

To determine

To Prepare: The schedule the bond premium amortization for first 4 periods.

(c)

To determine

To Prepare: The journal entry for the interest and amortization of the premium.

(d)

To determine

To Prepare: the balance sheet presentation of the bond liability.

Answer 6

Chapter 15, Problem 15.6AP

(a)

To determine

Bond: Bond is a financial instrument which generates the fixed income to the investors within a specified period of time. The income generated on the bonds is known as interest amount.

Amortization of Bonds: Bonds issued at discount or premium then the discounted or premium value is amortized from the contractual interest over a period of time and comes under the income statement.

Straight-line method of amortization of bonds: Straight-line method of amortization of bonds refers to set off an equal amount of discounted or premium amounts from the income statement over interest period.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To Prepare: The journal entry for the issuance of bond.

Answer 7

Chapter 15, Problem 15.6AP

(a)

To determine

Bond: Bond is a financial instrument which generates the fixed income to the investors within a specified period of time. The income generated on the bonds is known as interest amount.

Amortization of Bonds: Bonds issued at discount or premium then the discounted or premium value is amortized from the contractual interest over a period of time and comes under the income statement.

Straight-line method of amortization of bonds: Straight-line method of amortization of bonds refers to set off an equal amount of discounted or premium amounts from the income statement over interest period.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To Prepare: The journal entry for the issuance of bond.

Answer 8

(b)

To determine

To Prepare: The schedule the bond premium amortization for first 4 periods.

Answer 9

(b)

To determine

To Prepare: The schedule the bond premium amortization for first 4 periods.

Answer 10

(c)

To determine

To Prepare: The journal entry for the interest and amortization of the premium.

Answer 11

(c)

To determine

To Prepare: The journal entry for the interest and amortization of the premium.

Answer 12

(d)

To determine

To Prepare: the balance sheet presentation of the bond liability.

Answer 13

(d)

To determine

To Prepare: the balance sheet presentation of the bond liability.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 15 - Prob. 1Q Ch. 15 - 2. Contrast the following types of bonds: (a)...Ch. 15 - Prob. 3Q Ch. 15 - Prob. 4Q Ch. 15 - Prob. 5Q Ch. 15 - Prob. 6Q Ch. 15 - Prob. 7Q Ch. 15 - Prob. 8Q Ch. 15 - Prob. 9Q Ch. 15 - Prob. 10Q

To Prepare: The schedule the bond premium amortization for first 4 periods.

To Prepare: The journal entry for the interest and amortization of the premium.

To Prepare: the balance sheet presentation of the bond liability.

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Chapter 15 Solutions