(a) Introduction: A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender. To calculate: Stated interest rate on the issued bonds.

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Answer 1

Question

Chapter 9, Problem 73E

To determine

(a)

Introduction:

A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender.

To calculate:

Stated interest rate on the issued bonds.

To determine

(b)

Introduction:

A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender.

To calculate:

Interest Expense and discount amortization for period ending on 30^th June 2021.

To determine

(c)

Introduction:

A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender.

To calculate:

Liability for Balance after making interest payment for period 30^th June 2021.

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Recording Bond Entries and Preparing an Amortization Schedule—Debt Issuance Costs Mitchell Inc. issued 240, 6%, $1,000 bonds on January 1, 2020. The bonds pay cash interest semiannually each July 1, and December 31, and were issued to yield 7%. Debt issuance costs were $4,800. The bonds mature December 31, 2022, and the company uses the effective interest method to amortize bond discounts and debt issuance costs. Required a. Determine the selling price of the bonds, net of debt issuance costs. Round to the nearest dollar. b. Prepare an amortization schedule for the full bond term. c. Prepare journal entries on the following dates. 1. January 1, 2020, bond issuance. 2. July 1, 2020, interest payment. 3. December 31, 2020, interest payment.

Determining the present value of bonds payable and journalizing using the effective-interest amortization method Ari Goldstein issued $300,000 of 11%, five-year bonds payable on January 1, 2018. The market interest rate at the date of issuance was 10%, and the bonds pay interest semiannually. Requirements How much cash did the company receive upon issuance of the bonds payable? (Round to the nearest dollar.) Prepare an amortization table for the bond using the effective-interest method, through the first two interest payments. (Round to the nearest dollar.) Journalize the issuance of the bonds on January 1, 2018, and the first second payments of the semiannual interest amount and amortization of the bonds on June 30, 2018, and December 31, 2018. Explanations are not required.

Completing a Debt Amortization Table (Straight Line) Cagney Company sold $200,000 of bonds on January 1, 2024. A portion of the amortization table follows. Period CashPayment(Credit) InterestExpense(Debit) Discounton BondsPayable(Credit) Discounton BondsPayable Balance Bond PayableCarrying Value At issue $8,000 $192,000 06/30/24 $12,000 $12,800 $800 7,200 192,800 12/31/24 12,000 12,800 800 6,400 193,600 06/30/25 ? ? ? ? ? Required: 1. Determine the stated interest rate on these bonds.fill in the blank 1 % 2. Calculate the interest expense and the discount amortization for the interest period ending on June 30, 2025. Interest expense $fill in the blank 2 Discount amortization $fill in the blank 3 3. Calculate the liability balance shown on a balance sheet after the interest payment is recorded on June 30, 2025.$fill in the blank 4

Answer 2

Question

Chapter 9, Problem 73E

To determine

(a)

Introduction:

A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender.

To calculate:

Stated interest rate on the issued bonds.

To determine

(b)

Introduction:

A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender.

To calculate:

Interest Expense and discount amortization for period ending on 30^th June 2021.

To determine

(c)

Introduction:

A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender.

To calculate:

Liability for Balance after making interest payment for period 30^th June 2021.

Expert Solution & Answer

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Answer 3

Question

Chapter 9, Problem 73E

To determine

(a)

Introduction:

A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender.

To calculate:

Stated interest rate on the issued bonds.

To determine

(b)

Introduction:

A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender.

To calculate:

Interest Expense and discount amortization for period ending on 30^th June 2021.

To determine

(c)

Introduction:

A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender.

To calculate:

Liability for Balance after making interest payment for period 30^th June 2021.

Expert Solution & Answer

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Answer 4

Question

Chapter 9, Problem 73E

To determine

(a)

Introduction:

A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender.

To calculate:

Stated interest rate on the issued bonds.

To determine

(b)

Introduction:

A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender.

To calculate:

Interest Expense and discount amortization for period ending on 30^th June 2021.

To determine

(c)

Introduction:

A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender.

To calculate:

Liability for Balance after making interest payment for period 30^th June 2021.

Expert Solution & Answer

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Answer 5

Chapter 9, Problem 73E

To determine

(a)

Introduction:

A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender.

To calculate:

Stated interest rate on the issued bonds.

To determine

(b)

Introduction:

A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender.

To calculate:

Interest Expense and discount amortization for period ending on 30^th June 2021.

To determine

(c)

Introduction:

A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender.

To calculate:

Liability for Balance after making interest payment for period 30^th June 2021.

Answer 6

Chapter 9, Problem 73E

To determine

(a)

Introduction:

A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender.

To calculate:

Stated interest rate on the issued bonds.

Answer 7

Chapter 9, Problem 73E

To determine

(a)

Introduction:

A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender.

To calculate:

Stated interest rate on the issued bonds.

Answer 8

To determine

(b)

Introduction:

A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender.

To calculate:

Interest Expense and discount amortization for period ending on 30^th June 2021.

Answer 9

To determine

(b)

Introduction:

A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender.

To calculate:

Interest Expense and discount amortization for period ending on 30^th June 2021.

Answer 10

To determine

(c)

Introduction:

A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender.

To calculate:

Liability for Balance after making interest payment for period 30^th June 2021.

Answer 11

To determine

(c)

Introduction:

A bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically. It is a breakdown of large debt to borrow as it may be too large for an individual lender.

To calculate:

Liability for Balance after making interest payment for period 30^th June 2021.

Answer 12

Expert Solution & Answer

Answer 13

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Answer 14

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Answer 15

Ch. 9 - Prob. 1DQ Ch. 9 - What is the difference between a bond and a note?...Ch. 9 - What does the face (or Par) value of a bond...Ch. 9 - Prob. 4DQ Ch. 9 - What is the stated or coupon rate of a bond?Ch. 9 - Prob. 6DQ Ch. 9 - How does a secured bond differ from an unsecured...Ch. 9 - Prob. 8DQ Ch. 9 - Prob. 9DQ Ch. 9 - Prob. 10DQ

Solution Summary: The author explains that a bond is long term liability wherein the issuer is entitled to pay the face value of the bond at the time of maturity and make interest payments periodically.

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Chapter 9 Solutions