Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter E, Problem E.13S
(Learning Objective 5: Calculate and record interest on a bond investment issued at a discount) Using the data from E-S-12, calculate the amount of discount amortization (using the
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
E. Assuming the company closets it's books on December 31, prepare the journal entres for 12/31/2019 and 1/1/2020
(Learning Objective 2: Issue bonds payable at a premium and amortize bonds using theeffective-interest method) Leon Corporation issued $400,000 of 10%, 10-year bonds payableon January 1, 2019. The market interest rate at the date of issuance was 8%, and the bonds payinterest semiannually (on June 30 and December 31). Leon Corporation’s year-end is June 30.1. Using the PV function in Excel, calculate the issue price of the bonds.2. Prepare an effective-interest amortization table for the bonds through the first three interestpayments. Round amounts to the nearest dollar.3. Record Leon Corporation’s issuance of the bonds on January 1, 2019, and payment of thefirst semiannual interest amount and amortization of the bond premium on June 30, 2019.Explanations are not required.
(Learning Objectives 2, 3, 6: Issue convertible bonds at a discount, amortize usingthe effective-interest method, and convert bonds; report bonds payable on the balancesheet) On December 31, 2018, Mainland Corporation issues 6%, 10-year convertible bondspayable with a face value of $4,000,000. The semiannual interest dates are June 30 andDecember 31. The market interest rate is 8%. Mainland amortizes bond discounts using theeffective-interest method.Requirements1. Use the PV function in Excel to calculate the issue price of the bonds.2. Prepare an effective-interest method amortization table for the term of the bonds usingExcel.3. Journalize the following transactions:a. Issuance of the bonds on December 31, 2018. Credit Convertible Bonds Payable.b. Payment of interest and amortization of the bond discount on June 30, 2019.c. Payment of interest and amortization of the bond discount on December 31, 2019.d. Conversion by the bondholders on July 1, 2020, of bonds with a total face value…
Chapter E Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Ch. E - Prob. 1QCCh. E - Rolling Hills Productions held investments in...Ch. E - Prob. 3QCCh. E - Crandall's investment is in less than 2% of...Ch. E - Dumois Corporation purchased 1,500 shares of...Ch. E - Prob. 6QCCh. E - Use the Dumois Corporation data in question 5....Ch. E - Prob. 8QCCh. E - Prob. 9QCCh. E - Prob. 10QC
Ch. E - Prob. E.1SCh. E - (Learning Objective 2: Account for investments in...Ch. E - Prob. E.3SCh. E - Prob. E.4SCh. E - Prob. E.5SCh. E - Prob. E.6SCh. E - Prob. E.7SCh. E - Prob. E.8SCh. E - Prob. E.9SCh. E - Prob. E.10SCh. E - (Learning Objective 5: Record a held-to-maturity...Ch. E - Prob. E.12SCh. E - (Learning Objective 5: Calculate and record...Ch. E - Prob. E.14SCh. E - Prob. E.15SCh. E - Prob. E.16SCh. E - Prob. E.17AECh. E - (Learning Objective 2: Record transactions for...Ch. E - (Learning Objective 2: Analyze and report...Ch. E - Prob. E.20AECh. E - Prob. E.21AECh. E - Prob. E.22AECh. E - Prob. E.23AECh. E - Prob. E.24BECh. E - Prob. E.25BECh. E - (Learning Objective 2: Analyze and report...Ch. E - (Learning Objective 3: Account for transactions...Ch. E - Prob. E.28BECh. E - Prob. E.29BECh. E - Prob. E.30BECh. E - Prob. E.31QCh. E - Prob. E.32QCh. E - Prob. E.33QCh. E - Prob. E.34QCh. E - Prob. E.35QCh. E - Dividends received on an equity-method investment...Ch. E - Prob. E.37QCh. E - Prob. E.38QCh. E - Prob. E.39APCh. E - (Learning Objectives 2, 3: Analyze and report...Ch. E - (Learning Objectives 2, 3: Analyze and report...Ch. E - Prob. E.42APCh. E - Prob. E.43BPCh. E - LO 2, 3 (Learning Objectives 2, 3: Analyze and...Ch. E - Prob. E.45BPCh. E - Prob. E.46BPCh. E - Prob. E.47DC
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
- Learning Objective 3:Question 1: Straight-line MethodWired Inc. sold 10-year bonds with a total face amount of $1,500,000 and a stated rate of 10%. The bonds sold for $1,400,000 on January 1, 2020, and pay interest semiannually on June 30 and December 31.Required:1. Prepare the entry to recognize the sale of the bonds. 2. Determine the amount of the semiannual interest payment required by the bonds. 3. Prepare the journal entry made by Wired at June 30, 2020, to recognize the interest expense and an interest payment.Record the first interest payment. 4. Determine the amount of interest expense for 2020.arrow_forward(Learning Objective 1: Measure cash amounts for a bond payable (premium);amortize bond premium using the straight-line method) Town Bank has $100,000 of 4%debenture bonds outstanding. The bonds were issued at 106 in 2018 and mature in 2038. Thebonds have annual interest payments.Requirements1. How much cash did Town Bank receive when it issued these bonds?2. How much cash in total will Town Bank pay the bondholders through the maturity date ofthe bonds?3. Calculate the difference between your answers to requirements 1 and 2. This differencerepresents Town Bank’s total interest expense over the life of the bonds.4. Compute Town Bank’s annual interest expense using the straight-line amortization method.Multiply this amount by 20. Your 20-year total should be the same as your answer torequirement 3.arrow_forwardLearning Objectives 2, 3, 6: Issue convertible bonds at a discount; amortize usingthe effective interest method; convert bonds; report bonds payable on the balance sheet) OnDecember 31, 2018, Herndon Corporation issues 6%, 10-year convertible bonds payable witha face value of $1,000,000. The semiannual interest dates are June 30 and December 31. Themarket interest rate is 7%. Herndon amortizes bond discounts using the effective-interestmethod.Requirements1. Use the PV function in Excel to calculate the issue price of the bonds.2. Prepare an effective-interest method amortization table for the term of the bonds usingExcel.3. Journalize the following transactions:a. Issuance of the bonds on December 31, 2018. Credit Convertible Bonds Payable.b. Payment of interest and amortization of the bond discount on June 30, 2019.c. Payment of interest and amortization of the bond discount on December 31, 2019.d. Conversion by the bondholders on July 1, 2020, of bonds with a total face value…arrow_forward
- I need help with step 2 of this problem.arrow_forwardLearning Objective 2:Question 2 Robertson Corp. provides pool supplies to community pools in the Midwest. This year, Roberston Corp. issued 2,500 bonds with a $1,000 face value. The nominal rate for each bond is 8%. Required: Prepare the necessary journal entries to record the issuance of these bonds assuming the bonds were issued (a) at par, (b) at 103, and (c) at 96.arrow_forwarddont give answer in image formatarrow_forward
- PLEASE help me answer these questions, thank you very much. 1) When the amount earned on a deposit has become part of the principal at the end of a specified time period the concept is called A) discount interest. B) compound interest. C) primary interest. D) future value. 2) The future value of $100 received today and deposited at 6 percent for four years is A) $126. B) $ 79. C) $124. D) $116. 3) The future value of $200 received today and deposited at 8 percent for three years is A) $248. B) $252. C) $158. D) $200. 4) The amount of money that would have to be invested today at a given interest rate over a specified period in order to equal a future amount is called A) future value. B) present value. C) future value of an annuity. D) present value of an annuity. 5) The future value of a dollar ________ as the interest rate increases and ________ the farther in the future an initial deposit is to be received. A) decreases; decreases B) decreases; increases C) increases;…arrow_forward10. Journal entry worksheet: 1. Record the bond issue. (Jan. 01, 2021)2. Record the first semiannual interest payment. (June 30, 2021)3. Record the second semiannual interest payment. (Dec. 31, 2021)thank you so much!arrow_forwardplease use P*R*T fomular as well. Thanksarrow_forward
- Question-based on, "Interest". I have tried it. Any help would be appreciated.arrow_forwardIn your initial examination of National Finance Company, you find the following ledger account balances: 12% Bonds Payable-Due 10 years from January 1, 2020 Debit Credit P 5,000,000 1/2/2020 Cash Receipts Journal Bonds Payable Redeemed Debit Credit 10/01/2022 Cash Disbursement Journal P 1,110,000 Bond Discount Credit Debit P 500,000 1/2/2020 Cash Receipts Journal Bond Interest Expense Credit Debit P 300,000 1/1/2022 Cash Disbursement Journal 7/1/2022 Cash Disbursement Journal 300,000 The bonds were redeemed for permanent cancellation on October 1, 2022 at 108 plus accrued interest. Compute the bond interest expense for the year 2022 Balance Balance Balance Balancearrow_forwardThe following bond transactions occurred during 2024 for the YU Institute of Higher Learning (YU) and Page Ltd.: Mar. 1 Mar. 1 Sept. 1 Your answer is partially correct. Prepare all required entries for YU, the investee, to record the above transactions. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem. Round answers to O decimal places, e.g. 5,125.) Date Mar. 1 YU issued $16.20 million seven-year, 5% bonds at 102 (this means 102% of face value) at a price to yield a market interest rate of 4.66%. The bonds pay interest semi-annually on September 1 and March 1. Page Ltd. purchased $5.40 million of YU's bonds at 102 as a long-term investment to be held to maturity. YU paid the semi-annual interest on the bonds. Sept. 1 Account Titles and…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Bonds 101 (DETAILED EXPLANATION FOR BEGINNERS); Author: It's Your Girl Rose;https://www.youtube.com/watch?v=Gskqx8dy9To;License: Standard Youtube License