College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
22nd Edition
ISBN: 9781305666160
Author: James A. Heintz, Robert W. Parry
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 22, Problem 8SPA
BONDS ISSUED AT FACE VALUE Ito Co. issued the following bonds
REQUIRED
Prepare journal entries for:
(a) Issuance of the bonds.
(b) Interest payment on the bonds on September 30, 20-1.
(c) Year-end adjustment on the bonds for 20-1.
(d) Reversing entry for the beginning of 20-2.
(e) Interest payments on the bonds for 20-2 (March 31 and September 30).
(f) Redemption at maturity.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
[The following information applies to the questions displayed below.]
Hillside issues $4,000,000 of 6%, 15-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and
December 31.
The bonds are issued at a price of $3,456,448.
Required:
1. Prepare the January 1 journal entry to record the bonds' issuance.
2(a) For each semiannual period, complete the table below to calculate the cash payment.
2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization.
2(c) For each semiannual period, complete the table below to calculate the bond interest expense.
3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.
4. Prepare the first two years of a straight-line amortization table.
5. Prepare the journal entries to record the first two interest payments.
Complete this question by entering your answers in the tabs below.
Req 1
Req 2A to 2C
Req 3
Req 4
Req 5
For each…
On January 1, Year 1, Price Company issued $291,000 of five-year, 5 percent bonds at 98. Interest is payable annually on December 31.
The discount is amortized using the straight-line method.
Required
Prepare the journal entries to record the bond transactions for Year 1 and Year 2. (If no entry is required for a transaction/event,
select "No journal entry required" in the first account field.)
View transaction list
Journal entry worksheet
1
>
Record the entry for issuance of bonds.
Note: Enter debits before credits.
Date
General Journal
Debit
Credit
Jan 01
Record entry
Clear entry
View general journal
Journalize the entries to record the following:
If an amount box does not require an entry, leave it blank.
a. The initial acquisition of the bonds on May 1.
May 1
b. The semiannual interest received on November 1.
Nov. 1
c. The sale of the bonds on November 1.
Nov. 1
d. The accrual of $1,360 interest on December 31.
Dec. 31
Chapter 22 Solutions
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
Ch. 22 - A secured bond is one that is backed by specific...Ch. 22 - Prob. 2TFCh. 22 - When bonds are issued at face value, the debit to...Ch. 22 - Prob. 4TFCh. 22 - Prob. 5TFCh. 22 - Bonds that give the holder the option of...Ch. 22 - Prob. 2MCCh. 22 - Prob. 3MCCh. 22 - Prob. 4MCCh. 22 - Bond sinking fund earnings are (a) subtracted from...
Ch. 22 - Prob. 1CECh. 22 - Prob. 2CECh. 22 - Prob. 3CECh. 22 - Prob. 4CECh. 22 - Prob. 5CECh. 22 - Prob. 1RQCh. 22 - Prob. 2RQCh. 22 - Prob. 3RQCh. 22 - Prob. 4RQCh. 22 - What accounts are affected when bonds are issued...Ch. 22 - Prob. 6RQCh. 22 - Prob. 7RQCh. 22 - Prob. 8RQCh. 22 - Prob. 9RQCh. 22 - When bonds are redeemed before maturity, how is...Ch. 22 - Prob. 11RQCh. 22 - How should sinking fund earnings be reported on...Ch. 22 - Prob. 13RQCh. 22 - Prob. 1SEACh. 22 - Prob. 2SEACh. 22 - Prob. 3SEACh. 22 - REDEMPTION OF BONDS ISSUED AT FACE VALUE Levesque...Ch. 22 - REDEMPTION OF BONDS ISSUED AT A PREMIUM Brighton...Ch. 22 - REDEMPTION OF BONDS ISSUED AT A DISCOUNT...Ch. 22 - BOND SINKING FUNDS M. J. Adams Corporation pays...Ch. 22 - BONDS ISSUED AT FACE VALUE Ito Co. issued the...Ch. 22 - Prob. 9SPACh. 22 - Prob. 10SPACh. 22 - Prob. 11SPACh. 22 - Prob. 12SPACh. 22 - BONDS ISSUED AT FACE VALUE WITH SINKING FUND...Ch. 22 - Prob. 1SEBCh. 22 - Prob. 2SEBCh. 22 - Prob. 3SEBCh. 22 - Prob. 4SEBCh. 22 - Prob. 5SEBCh. 22 - REDEMPTION OF BONDS ISSUED AT A DISCOUNT Medina...Ch. 22 - Prob. 7SEBCh. 22 - BONDS ISSUED AT FACE VALUE Ramona Arroyo Co....Ch. 22 - Prob. 9SPBCh. 22 - Prob. 10SPBCh. 22 - Prob. 11SPBCh. 22 - BONDS ISSUED AT A DISCOUNT, REDEEMED AT A GAIN...Ch. 22 - BONDS ISSUED AT FACE VALUE WITH SINKING FUND...Ch. 22 - MANAGING YOUR WRITING The business where you work...Ch. 22 - Prob. 1ECCh. 22 - MASTERY PROBLEM Jackson, Inc.s fiscal year ends...Ch. 22 - CHALLENGE PROBLEM This problem challenges you to...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- BONDS ISSUED AT FACE VALUE Ramona Arroyo Co. issued the following bonds: REQUIRED Prepare journal entries for: (a) Issuance of the bonds. (b) Interest payment on the bonds on September 30, 20-1. (c) Year-end adjustment on the bonds for 20-1. (d) Reversing entry for the beginning of 20-2. (e) Interest payments on the bonds for 20-2 (March 31 and September 30). (f) Redemption at maturity.arrow_forwardAggies Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018, and received $540,000. Interest is payable semi-annually. The premium is amortized using the straight-line method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. Dec. 31, 2018: entry to record payment of interest to bondholders C. Dec. 31, 2018: entry to record amortization of premiumarrow_forwardDixon Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $480,000. Interest is payable annually. The discount is amortized using the straight-line method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. June 30, 2019: entry to record payment of interest to bondholders C. June 30, 2019: entry to record amortization of discount D. June 30, 2020: entry to record payment of interest to bondholders E. June 30, 2020: entry to record amortization of discountarrow_forward
- On Jan. 1, Year 1, Foxcroft Inc. issued 100 bonds with a face value of $1,000 for $104,000. The bonds had a stated rate of 6% and paid interest semiannually. What is the journal entry to record the issuance of the bonds?arrow_forwardVolunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $540,000. Interest is payable annually. The premium is amortized using the straightline method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. June 30, 2019: entry to record payment of interest to bondholders C. June 30, 2019: entry to record amortization of premium D. June 30, 2020: entry to record payment of interest to bondholders E. June 30, 2020: entry to record amortization of premiumarrow_forwardEdward Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $480,000. Interest is payable semiannually. The discount is amortized using the straight-line method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. Dec. 31, 2018: entry to record payment of interest to bondholders C. Dec. 31, 2018: entry to record amortization of discountarrow_forward
- BONDS ISSUED AT A DISCOUNT, REDEEMED AT A GAIN Ellis Co. issued the following bonds at a discount: REQUIRED Prepare journal entries for: (a) Issuance of the bonds. (b) Interest payment and discount amortization on the bonds on September 30, 20-1. (c) Year-end adjustment on the bonds for 20-1. (d) Reversing entry for the beginning of 20-2. (e) Redemption of 50,000 of the bonds on April 1, 20-4, at 96.arrow_forwardBONDS ISSUED AT FACE VALUE WITH SINKING FUND Martin Manufacturing issued the following bonds: REQUIRED Prepare journal entries for: (a) Issuance of the bonds. (b) Deposit to sinking fund on June 1. (c) Interest payment on the bonds on September 30, 20-1. (d) Earnings of 2,400 on the sinking fund in 20-1. (e) Year-end adjustment on the bonds for 20-1. (f) Reversing entry for the beginning of 20-2. (g) Interest payment on the bonds on March 31, 20-2. (h) Deposit to sinking fund on June 1, 20-2. (i) Redemption at maturity from the sinking fund. (j) Return of excess cash of 1,050 from the sinking fund to the corporation.arrow_forwardCampbell, Inc. produces and sells outdoor equipment. On July 1, 20Y1, Campbell issued $40,000,000 of 10-year, 10% bonds at a market (effective) interest rate of 9%, receiving cash of $42,601,480. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds. 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond premium, using the interest method. b. The interest payment on June 30, 20Y2, and the amortization of the bond premium, using the interest method. 3. Determine the total interest expense for 20Y1.arrow_forward
- On August 1, 2022, Martinez Corp. issued $489,600, 6%, 10-year bonds at face value. Interest is payable annually on August 1. Martinez’s year-end is December 31. Prepare the journal entry to record the issuance of the bonds. Date Account Titles and Explanation Debit Credit Aug. 1 enter an account title to record the issuance of the bonds on August 1enter an account title to record the issuance of the bonds on August 1arrow_forwardProblem IV (113) - Entries for bonds payable. Prepare the necessary journal entries to record the following transactions relating to the long-term issuance of bonds of Titus Co.: March 1 Issued $800,000 face value Titus Co. second mortgage, 8% bonds for $872,160, including accrued interest. Interest is payable semiannually on December 1 and June 1 with the bonds maturing 10 years from this past December 1. The bonds are callable at 102. June 1 Paid semiannual interest on Titus Co. bonds. (Use straight-line amortization of any premium or discount.) December 1 Paid semiannual interest on Titus Co. bonds and purchased $400,000 face value bonds at the call price in accordance with the provisions of the bond indenture. Solution Problem IV (113) Date 1 March Account Name Ref Debit Credit 1 June 1 December 1 Decemberarrow_forwardEntries for Bonds Payable, including bond redemption The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year: Year 1 July 1. Issued $3,250,000 of five-year, 8% callable bonds dated July 1, Year 1, at a market (effective) rate of 10%, receiving cash of $2,999,044. Interest is payable semiannually on December 31 and June 30. Dec. 31. Paid the semiannual interest on the bonds. The bond discount amortization of $25,096 is combined with the semiannual interest payment. Dec. 31. Closed the interest expense account. Year 2 June 30. Paid the semiannual interest on the bonds. The bond discount amortization of $25,096 is combined with the semiannual interest payment. Dec. 31. Paid the semiannual interest on the bonds. The bond discount amortization of $25,096 is combined with the semiannual interest payment. Dec. 31. Closed the interest expense account. Year 3 June 30. Recorded the redemption of the bonds, which were called…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
College Accounting, Chapters 1-27 (New in Account...AccountingISBN:9781305666160Author:James A. Heintz, Robert W. ParryPublisher:Cengage Learning
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Excel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
College Accounting, Chapters 1-27 (New in Account...
Accounting
ISBN:9781305666160
Author:James A. Heintz, Robert W. Parry
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
Financial Accounting - Long-term Liabilities - Bonds; Author: Finance & Accounting Videos by Prof Coram;https://www.youtube.com/watch?v=_1fwsJIGMos;License: Standard Youtube License