A company issued $500,000 of bonds for $498,351. Interest is paid semiannually. The bond markets and the financial press are likely to report the bond issue price as
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A company issued $500,000 of bonds for $498,351. Interest is paid semiannually. The bond markets and the financial press are likely to report the
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- 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 semi-annually. What is the journal entry to record the first payment to the bondholders?Company E issues $300,000 worth of 7.5% bonds on January 1, 20x2, which will mature on December 31, 20x3. The market rate on the date of issuance is 6%. Interest will be paid semiannually on June 30 and December 31. Calculate the purchase price of the bonds. Does the price make sense? Explain. How will the bond value appear in the newspaper? Record all journal entries necessary from the date of issue until the maturity date. Be sure to show all calculations.For each of the following three examples, provide the journal entry that the company would make on the date the bonds are issued. Note that you will need to do a present value calculation to determine the cash proceeds from each bond issue. You can round your answer to the nearest dollar. 1. Andersson Inc. issues 8-year bonds with a face value of $50,000,000 and a stated annual interest rate of 6%. The bonds pay interest semiannually on June 30 and December 31. The annual market rate of interest on the date of issue is 8%.
- A company issued $93,000 bonds at 108. If the total interest payments during the term of the bond adds up to $70,000, then the interest expense over the bond's term will be: Type your numeric answer and submit 85560 Correct Answer: v 62560.0On the first day of the fiscal year, a company issues a $1,100,000, 6%, 9-year bond that pays semiannual interest of $33,000 ($1,100,000 × 6% × ½), receiving cash of $1,178,944. Journalize the bond issuance. If an amount box does not require an entry, leave it blank. Interest Expense Premium on Bonds Payable CashAjax, Inc., issued callable bonds with a par value of $1,000,000 that require the payment of a call premium of $10,000. The bonds have a carrying value of $990,000. We call these bonds prior to maturity on September 30. Complete the necessary journal entry by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns. View transaction list Journal entry worksheet Ajax, Inc., issued callable bonds with a par value of $1,000,000 that require the payment of a call premium of $10,000. The bonds have a carrying value of $990,000. We call these bonds prior to maturity on September 30. Note: Enter debits before credits. %24 .. 1:46 P %3D 3/28/202 F3 F4 F5 F8 F9 F10 F11 F12 Insert Fn Lock F6 F7 Prt Sc
- On January 1 Year 1, Gordon Corporation issued bonds with a face value of $70,000, a stated rate of interest of 6%, and a 5-year term to maturity. The bonds were issued at 98. Interest is payable in cash on December 31 each year. Gordon uses the straight-line method to amortize bond discounts and premiums. Which of the following shows the effect of the bond issuance on the financial statements? Balance Sheet Assets = Liabilities + 70,000 68,600 70,000 68,600 A. 70,000 B. 68,600 C. 68,600 D. 70,000 Multiple Choice O O O O Option D Option A Option B Option C Stockholders' Equity n/a n/a (1,400) 1,400 Revenue n/a n/a n/a n/a Income Statement Expense n/a n/a 1,400 (1,400) = Net Income n/a n/a (1,400) 1,400 Statement of Cash Flows 70,000 FA 68,600 FA 68,600 FA 70,000 FAOn the first day of the fiscal year, a company issues a $8,800,000, 11%, 7-year bond that pays semiannual interest of $484,000 ($8,800,000 × 11% × ½), receiving cash of $9,235,540. Journalize the bond issuance. If an amount box does not require an entry, leave it blank.On January 2, current year, Kalahari Limited issued $1,000,000, 10-year bonds for $1,150,000. The bonds pay interest on June 30 and December 31. The stated rate is 10% and the market rate is 8%. The company plans to use the effective interest method of amortizing bond discounts and premiums. The semiannual cash payment on the bonds is
- On the first day of the fiscal year, a company issues an $2,250,000, 12%, five-year bond that pays semiannual interest of $135,000 ($2,250,000 x 12% x ½), receiving cash of $2,379,360. Journalize the first interest payment and the amortization of the related bond premium. Round to the nearest dollar. Refer to the Chart of Accounts for exact wording of account titles. Chart of Accounts CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 111 Petty Cash 121 Accounts Receivable 122 Allowance for Doubtful Accounts 126 Interest Receivable 127 Notes Receivable 131 Merchandise Inventory 141 Office Supplies 191 Land 194 Office Equipment 195 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 221 Salaries Payable 231 Sales Tax Payable 232 Interest Payable 241 Notes Payable 251 Bonds Payable 252 Discount on Bonds Payable 253 Premium on Bonds Payable EQUITY 311 Common Stock…On the first day of the fiscal year, a company issues a $1,450,000, 5%, five-year bond that pays semiannual interest of $36,250 ($1,450,000 × 5% × ½), receiving cash of $1,408,720. Journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. Refer to the Chart of Accounts for exact wording of account titles. Chart of Accounts CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 111 Petty Cash 121 Accounts Receivable 122 Allowance for Doubtful Accounts 126 Interest Receivable 127 Notes Receivable 131 Merchandise Inventory 141 Office Supplies 191 Land 194 Office Equipment 195 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 221 Salaries Payable 231 Sales Tax Payable 232 Interest Payable 241 Notes Payable 251 Bonds Payable 252 Discount on Bonds Payable 253 Premium on Bonds Payable EQUITY 311 Common Stock 312…On the first day of the fiscal year, a company issues a $1,550,000, 12%, five-year bond that pays semiannual interest of $93,000 ($1,550,000 × 12% × ½), receiving cash of $1,503,140. Journalize the bond issuance on January 1. Refer to the Chart of Accounts for exact wording of account titles. Chart of Accounts CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 111 Petty Cash 121 Accounts Receivable 122 Allowance for Doubtful Accounts 126 Interest Receivable 127 Notes Receivable 131 Merchandise Inventory 141 Office Supplies 191 Land 194 Office Equipment 195 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 221 Salaries Payable 231 Sales Tax Payable 232 Interest Payable 241 Notes Payable 251 Bonds Payable 252 Discount on Bonds Payable 253 Premium on Bonds Payable EQUITY 311 Common Stock 312 Paid-In Capital in Excess of Par-Common Stock 315 Treasury Stock 321…