Bond: Bond is a debt instrument which provides the long term debt for the company and company pays the interest to its bondholders. 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. 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 of the issuance of bond.

Question

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Answer 1

Question

Chapter 15, Problem 15.9AP

(a)

To determine

Bond: Bond is a debt instrument which provides the long term debt for the company and company pays the interest to its bondholders.

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.

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 of the issuance of bond.

(b)

To determine

To prepare: The amortization table for three interest period.

(c)

To determine

To prepare: The journal entry of the accrual interest and amortization of discount on January 1, 2017.

(d)

To determine

To prepare: The journal entry for the payment of interest.

(e)

To determine

To prepare: The journal entry of the accrual interest and amortization of discount on January 1, 2018.

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Students have asked these similar questions

Suppose you take out a five-year car loan for $14000, paying an annual interest rate of 4%. You make monthly payments of $258 for this loan. Complete the table below as you pay off the loan. Months Amount still owed 4% Interest on amount still owed (Remember to divide by 12 for monthly interest) Amount of monthly payment that goes toward paying off the loan (after paying interest) 0 14000 1 2 3 + LO 5 6 7 8 9 10 10 11 12 What is the total amount paid in interest over this first year of the loan?

Suppose you take out a five-year car loan for $12000, paying an annual interest rate of 3%. You make monthly payments of $216 for this loan. mocars Getting started (month 0): Here is how the process works. When you buy the car, right at month 0, you owe the full $12000. Applying the 3% interest to this (3% is "3 per $100" or "0.03 per $1"), you would owe 0.03*$12000 = $360 for the year. Since this is a monthly loan, we divide this by 12 to find the interest payment of $30 for the month. You pay $216 for the month, so $30 of your payment goes toward interest (and is never seen again...), and (216-30) = $186 pays down your loan. (Month 1): You just paid down $186 off your loan, so you now owe $11814 for the car. Using a similar process, you would owe 0.03* $11814 = $354.42 for the year, so (dividing by 12), you owe $29.54 in interest for the month. This means that of your $216 monthly payment, $29.54 goes toward interest and $186.46 pays down your loan. The values from above are included…

Suppose you have an investment account that earns an annual 9% interest rate, compounded monthly. It took $500 to open the account, so your opening balance is $500. You choose to make fixed monthly payments of $230 to the account each month. Complete the table below to track your savings growth. Months Amount in account (Principal) 9% Interest gained (Remember to divide by 12 for monthly interest) Monthly Payment 1 2 3 $500 $230 $230 $230 $230 + $230 $230 10 6 $230 $230 8 9 $230 $230 10 $230 11 $230 12 What is the total amount gained in interest over this first year of this investment plan?

Answer 2

Question

Chapter 15, Problem 15.9AP

(a)

To determine

Bond: Bond is a debt instrument which provides the long term debt for the company and company pays the interest to its bondholders.

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.

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 of the issuance of bond.

(b)

To determine

To prepare: The amortization table for three interest period.

(c)

To determine

To prepare: The journal entry of the accrual interest and amortization of discount on January 1, 2017.

(d)

To determine

To prepare: The journal entry for the payment of interest.

(e)

To determine

To prepare: The journal entry of the accrual interest and amortization of discount on January 1, 2018.

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Answer 3

Question

Chapter 15, Problem 15.9AP

(a)

To determine

Bond: Bond is a debt instrument which provides the long term debt for the company and company pays the interest to its bondholders.

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.

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 of the issuance of bond.

(b)

To determine

To prepare: The amortization table for three interest period.

(c)

To determine

To prepare: The journal entry of the accrual interest and amortization of discount on January 1, 2017.

(d)

To determine

To prepare: The journal entry for the payment of interest.

(e)

To determine

To prepare: The journal entry of the accrual interest and amortization of discount on January 1, 2018.

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Answer 4

Question

Chapter 15, Problem 15.9AP

(a)

To determine

Bond: Bond is a debt instrument which provides the long term debt for the company and company pays the interest to its bondholders.

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.

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 of the issuance of bond.

(b)

To determine

To prepare: The amortization table for three interest period.

(c)

To determine

To prepare: The journal entry of the accrual interest and amortization of discount on January 1, 2017.

(d)

To determine

To prepare: The journal entry for the payment of interest.

(e)

To determine

To prepare: The journal entry of the accrual interest and amortization of discount on January 1, 2018.

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Answer 5

Chapter 15, Problem 15.9AP

(a)

To determine

Bond: Bond is a debt instrument which provides the long term debt for the company and company pays the interest to its bondholders.

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.

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 of the issuance of bond.

(b)

To determine

To prepare: The amortization table for three interest period.

(c)

To determine

To prepare: The journal entry of the accrual interest and amortization of discount on January 1, 2017.

(d)

To determine

To prepare: The journal entry for the payment of interest.

(e)

To determine

To prepare: The journal entry of the accrual interest and amortization of discount on January 1, 2018.

Answer 6

Chapter 15, Problem 15.9AP

(a)

To determine

Bond: Bond is a debt instrument which provides the long term debt for the company and company pays the interest to its bondholders.

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.

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 of the issuance of bond.

Answer 7

Chapter 15, Problem 15.9AP

(a)

To determine

Bond: Bond is a debt instrument which provides the long term debt for the company and company pays the interest to its bondholders.

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.

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 of the issuance of bond.

Answer 8

(b)

To determine

To prepare: The amortization table for three interest period.

Answer 9

(b)

To determine

To prepare: The amortization table for three interest period.

Answer 10

(c)

To determine

To prepare: The journal entry of the accrual interest and amortization of discount on January 1, 2017.

Answer 11

(c)

To determine

To prepare: The journal entry of the accrual interest and amortization of discount on January 1, 2017.

Answer 12

(d)

To determine

To prepare: The journal entry for the payment of interest.

Answer 13

(d)

To determine

To prepare: The journal entry for the payment of interest.

Answer 14

(e)

To determine

To prepare: The journal entry of the accrual interest and amortization of discount on January 1, 2018.

Answer 15

(e)

To determine

To prepare: The journal entry of the accrual interest and amortization of discount on January 1, 2018.

Answer 16

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Answer 17

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Answer 18

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Answer 19

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 amortization table for three interest period.

To prepare: The journal entry of the accrual interest and amortization of discount on January 1, 2017.

To prepare: The journal entry for the payment of interest.

To prepare: The journal entry of the accrual interest and amortization of discount on January 1, 2018.

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