Financial Accounting
4th Edition
ISBN: 9781259307959
Author: J. David Spiceland, Wayne M Thomas, Don Herrmann
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 9, Problem 9.10BE
Record bond issue and related annual interest (LO9–6)
Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $64,008 on January 1, 2018. The market interest rate for bonds of similar risk and maturity is 8%. Interest is paid annually on December 31.
1. Record the bond issue.
2. Record the first interest payment on December 31, 2018. (Hint: Interest expense is 8% times the carrying value of $64,008.)
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Hansaben
A.
On January 1, 2021, Bradley Company issued $100,000, 9%, 4-year bonds. Interest is
paid semi-annually on June 30 and December 31. The bonds were issued at $96,768
to yield an annual return of 10% and the effective interest rate was used.
REQUIRED:
1
Prepare the journal entry for the issuance of the bonds.
2
Prepare the journal entry required on June 30, 2021, for the interest.
3
In the spreadsheet, prepare the amortization schedule for the bond.
DATE
ACCOUNT
DEBIT
CREDIT
1
2
2. On June 30, 2018 the market rate of interest is 9%. Ramsey Corporation
issues$550,000 of 12%, 20 year bonds payable at $701,813. The bonds pay
interest on June 30 and December 31. The company amortizes bond
premium using the effective interest method.
a. Prepare a bond amortization table for the first 6 years of the bond
term
b. Record the issuance of the bond payable on June 30, 2018, the
payment of interest on Dec. 31, 2018 and June 30, 2019
Chapter 9 Solutions
Financial Accounting
Ch. 9 - What is capital structure? How do the capital...Ch. 9 - Prob. 2RQCh. 9 - How do interest expense and the carrying value of...Ch. 9 - Prob. 4RQCh. 9 - What are bond issue costs? What is an underwriter?Ch. 9 - Why do some companies issue bonds rather than...Ch. 9 - Prob. 7RQCh. 9 - What are convertible bonds? How do they benefit...Ch. 9 - How do we calculate the issue price of bonds? Is...Ch. 9 - Prob. 10RQ
Ch. 9 - If bonds issue at a discount, is the stated...Ch. 9 - Prob. 12RQCh. 9 - Prob. 13RQCh. 9 - Prob. 14RQCh. 9 - 15.If bonds issue at a discount, what happens to...Ch. 9 - Prob. 16RQCh. 9 - Prob. 17RQCh. 9 - Prob. 18RQCh. 9 - 19.If bonds with a face value of 250,000 and a...Ch. 9 - Prob. 20RQCh. 9 - Prob. 9.1BECh. 9 - Prob. 9.2BECh. 9 - Calculate the issue price of bonds (LO95) Ultimate...Ch. 9 - Calculate the issue price of bonds (LO95) Ultimate...Ch. 9 - Calculate the issue price of bonds (LO95) Ultimate...Ch. 9 - Prob. 9.6BECh. 9 - Prob. 9.7BECh. 9 - Prob. 9.8BECh. 9 - Prob. 9.9BECh. 9 - Record bond issue and related annual interest...Ch. 9 - Record bond issue and related annual interest...Ch. 9 - Prob. 9.12BECh. 9 - Prob. 9.13BECh. 9 - Prob. 9.14BECh. 9 - Prob. 9.15BECh. 9 - Prob. 9.16BECh. 9 - Prob. 9.17BECh. 9 - Calculate ratios (LO98) Surfs Up, a manufacturer...Ch. 9 - Prob. 9.1ECh. 9 - Prob. 9.2ECh. 9 - Compare operating and capital teasel (LO93, LO98)...Ch. 9 - listed below are terms and definitions associated...Ch. 9 - Prob. 9.5ECh. 9 - Prob. 9.6ECh. 9 - Prob. 9.7ECh. 9 - Prob. 9.8ECh. 9 - Prob. 9.9ECh. 9 - Prob. 9.10ECh. 9 - Prob. 9.11ECh. 9 - Prob. 9.12ECh. 9 - Prob. 9.13ECh. 9 - Prob. 9.14ECh. 9 - Prob. 9.15ECh. 9 - Prob. 9.16ECh. 9 - Prob. 9.17ECh. 9 - Prob. 9.18ECh. 9 - (LO92, LO98) On January 1, 2018, the general...Ch. 9 - Record and analyze installment notes (LO92) On...Ch. 9 - Explore the impact of leases on the debt to equity...Ch. 9 - Prob. 9.3APCh. 9 - Prob. 9.4APCh. 9 - Understand a bond amortization schedule (LO96) On...Ch. 9 - Prob. 9.6APCh. 9 - Calculate and analyze ratios (LO98) Selected...Ch. 9 - Prob. 9.1BPCh. 9 - Explore the impact of leases on the debt to equity...Ch. 9 - Prob. 9.3BPCh. 9 - Prob. 9.4BPCh. 9 - Prob. 9.5BPCh. 9 - Prob. 9.6BPCh. 9 - Calculate and analyze ratios (LO98) Selected...Ch. 9 - Prob. 9.1APCPCh. 9 - Prob. 9.2APFACh. 9 - The Buckle, Inc. Financial information for Buckle...Ch. 9 - American Eagle Outfitters, Inc., vs. The Buckle,...Ch. 9 - Ethics The Tony Hawk Skate Park was built in early...Ch. 9 - Prob. 9.7APWCCh. 9 - Prob. 9.8APEM
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