Sheridan Company issues $6070000 face value of bonds at 95 on January 1, 2016. The bonds...
Sheridan Company issues $6070000 face value of bonds at 95 on
January 1, 2016. The bonds are dated January 1, 2016, pay interest
semiannually at 8% on June 30 and December 31, and mature in 10
years. Straight-line amortization is used for discounts and
premiums. On September 1, 2019, $3642000 of the bonds are called at
101 plus accrued interest. What gain or loss would be recognized on
the called bonds on September 1, 2019?
| $260050 loss. |
| $364200 loss. |
| $151750 loss. |
| $204550 loss. |
Homework Answers
Discount on Bonds = 6070000*(1-0.95) = $303500
Amortization of discount upto September 1, 2019 = 303500*44/120 = 111283
Balance in discount account = 303500 - 111283 = $192217
Discount related to called bonds = 192217*3642000/6070000 = $115330
Loss recognized on called bonds = discount + premium at the time of payment
= $115330+3642000*1%
= $151750 Loss
Add Answer to:
Sheridan Company issues $6070000 face value of bonds at 95 on
January 1, 2016. The bonds...
On January 1, 2017, Sheffield Corp. issued ten-year bonds with a face amount of $5800000 and...
On January 1, 2017, Sheffield Corp. issued ten-year bonds with a face amount of $5800000 and a stated interest rate of 8% payable annually on January 1 . The bonds were priced to yield 10%. Present value factors are as follows: At 8% At 10% Present value of 1 for 10 periods 0.463 0.386 Present value of an ordinary annuity of 1 for 10 periods 6.710 6.145. The total issue price of the bonds was... 1. A company issues $...
Popper Corp. issues 8% bonds at 96 on January 1, 2019. The bonds have a face...
Popper Corp. issues 8% bonds at 96 on January 1, 2019. The bonds have a face value of $10,000,000, pay coupons semiannually on June 30 and December 31, and mature in 10 years. Popper uses straight-line amortization for discounts and premiums. Accordingly, at December 31, 2021, the unamortized discount is $280,000. On October 1, 2022, Popper invokes a call option and extinguishes the bonds at 102 plus accrued interest. How much gain or loss should Popper recognize on the early...
Questions 7 & 8 Use the Same Information 7. A company issues $ 16,800,000, 5.8%, 20-year...
Questions 7 & 8 Use the Same Information 7. A company issues $ 16,800,000, 5.8%, 20-year bonds to yield 6% on January 1, 2017, Interest is paid on June 30 and December 31. The proceeds from the bonds are $16,411,672. Using effective- interest amortization, what amount of interest will be reported on the income statement for the year ending December 31, 2017? (Round answers to whole numbers throughout calculation...Enter answer with no commas... .e, 16000000) Answer: 8. A company issues...
Willow Creek Manufacturing, Inc. issued $7,000,000 face value of bonds at 99 on January 1, 2019....
Willow Creek Manufacturing, Inc. issued $7,000,000 face value of bonds at 99 on January 1, 2019. The bonds are dated January 1, 2019, pay interest semi-annually at 6% on June 30 and December 31, and mature in 10 years. Straight-line amortization is used for discounts and premiums. On January 1, 2024, $4,200,000 of the bonds are called at 101. 1. The cash paid by Willow Creek Manufacturing when the bonds are redeemed would be... 2. The gain or loss on...
1. Merchant Company issued 10-year bonds on January 1. The 7% bonds have a face value...
1. Merchant Company issued 10-year bonds on January 1. The 7% bonds have a face value of $709,000 and pay interest every January 1 and July 1. The bonds were sold for $589,257 based on the market interest rate of 8%. Merchant uses the effective interest method to amortize bond discounts and premiums. On July 1 of the first year, Merchant should record interest expense (round to the nearest dollar) of a.$23,570 b.$20,624 c.$28,360 d.$24,815 2. Franklin Corporation issues $94,000,...
On March 1, 2019, Face Corporation issues 5-year bonds, dated January 1, 2019, with a face...
On March 1, 2019, Face Corporation issues 5-year bonds, dated January 1, 2019, with a face value of $200,000. These bonds have an annual interest rate of 10%, payable semiannually on January 1 and July 1. The effective interest rate is 8%. The fiscal year ends on December 31. (rounding up to the nearest dollar) 1. Prepare the journal entry to record the bond issuance plus accrued interest on March 1, 2019. (Use effective interest method) 2. Prepare the journal...
On January 1, 2016, Hackman Corporation issued $1,400,000 face value 12% bonds dated January 1, 2016,...
On January 1, 2016, Hackman Corporation issued $1,400,000 face value 12% bonds dated January 1, 2016, for $1,423,060. The bonds pay interest semiannually on June 30 and December 31 and are due December 31, 2020. Hackman uses the straight-line amortization method. Required: Record the issuance of the bonds and the first two interest payments.
Quatro Co. issues bonds dated January 1, 2019, with a par value of $850,000. The bonds'...
Quatro Co. issues bonds dated January 1, 2019, with a par value of $850,000. The bonds' annual contract rate is 12%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $893,131. 1. What is the amount of the premium on these bonds at issuance? 2. How much total bond interest expense will be recognized over...
On January 1, a company issues bonds dated January 1 with a par value of $550,000....
On January 1, a company issues bonds dated January 1 with a par value of $550,000. The bonds mature in 5 years. The contract rate is 6%, and interest is paid semiannually on June 30 and December 31. The market rate is 7 % and the bonds are sold for $527119. The journal entry to record the second interest payment using the effective interest method of amortization is
Tano Company issues bonds with a par value of $92,000 on January 1, 2019. The bonds’...
Tano Company issues bonds with a par value of $92,000 on January 1, 2019. The bonds’ annual contract rate is 10%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 12%, and the bonds are sold for $87,480. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over...
On January 1, 2017, Sheffield Corp. issued ten-year bonds with a face amount of $5800000 and a stated interest rate of 8% payable annually on January 1 . The bonds were priced to yield 10%. Present value factors are as follows: At 8% At 10% Present value of 1 for 10 periods 0.463 0.386 Present value of an ordinary annuity of 1 for 10 periods 6.710 6.145. The total issue price of the bonds was... 1. A company issues $...
Questions 7 & 8 Use the Same Information 7. A company issues $ 16,800,000, 5.8%, 20-year bonds to yield 6% on January 1, 2017, Interest is paid on June 30 and December 31. The proceeds from the bonds are $16,411,672. Using effective- interest amortization, what amount of interest will be reported on the income statement for the year ending December 31, 2017? (Round answers to whole numbers throughout calculation...Enter answer with no commas... .e, 16000000) Answer: 8. A company issues...
Quatro Co. issues bonds dated January 1, 2019, with a par value of $850,000. The bonds' annual contract rate is 12%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $893,131. 1. What is the amount of the premium on these bonds at issuance? 2. How much total bond interest expense will be recognized over...
On January 1, a company issues bonds dated January 1 with a par value of $550,000. The bonds mature in 5 years. The contract rate is 6%, and interest is paid semiannually on June 30 and December 31. The market rate is 7 % and the bonds are sold for $527119. The journal entry to record the second interest payment using the effective interest method of amortization is
Most questions answered within 3 hours.
-
BASED ON THE AIRBNB, ETSY, UBER: GROWING FROM ONE THOUSAND TO
ONE MILLION CUSTOMERS HARVARD CASE:...
asked 15 minutes ago -
Which of these methods cause sterilization?
Autoclaving
Dry heat
Gamma irradiation
Ethylene oxide
A.
Yes
No...
asked 21 minutes ago -
A biologist wishes to estimate the effect of an antibiotic on
the growth of a particular...
asked 29 minutes ago -
O’Deesha Company has the following information available:
Quality engineering of
products
$20,000
Quality training of
employees &n
asked 36 minutes ago -
a) Draw two water molecules.
b) Clearly name and label the type of bond that exists...
asked 1 hour ago -
C - Language
Write a loop that sets each array element to the sum of itself...
asked 2 hours ago -
(63
#14)
which of the following statments best describes how chamging
the concentration of the substances...
asked 6 hours ago -
In the following reaction, which element is undergoing
oxidation: Na2SO3 + N2O --> N2 + Na2SO4...
asked 7 hours ago -
Which of the following pairs of ions have the same electron
configuration?
I: Br− and Se2−...
asked 9 hours ago -
The Foremost Composite Materials Company is planning a two-day
sales conference for October 19-20. The conference...
asked 10 hours ago -
3) Illustrate the observed pattern of relatedness of organisms
versus adaptations to specific conditions. This means...
asked 10 hours ago -
In winter a lake has a 0.35 m thick ice layer over 1.10 m of
water....
asked 11 hours ago