18. Given the information below, which bond(s) will be issued at a premium? Bond 1 Bond 2...
18. Given the information below, which bond(s) will be issued at a premium?
|
Bond 1 |
Bond 2 |
Bond 3 |
Bond 4 |
|
|
Stated Rate of Return |
6% |
4% |
8% |
7% |
|
Market Rate of Return |
7% |
3% |
8% |
5% |
Homework Answers
| Particulars | Bond 1 | Bond 2 | Bond 3 | Bond 4 |
| Stated Rate of Return | 6% | 4% | 8% | 7% |
| Market Rate of Return | 7% | 3% | 8% | 5% |
| Stated Rate > Market Rate | No | Yes | Equal | Yes |
| Bond will be issued at premium | No | Yes | No benefit | Yes |
If stated rate of return is more than the market rate of return then bond will be issued at premium. Since the bond issued with more stated rate of return will provide more return than the market rate of return.
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18. Given the information below, which bond(s) will
be issued at a premium?
Bond 1
Bond 2...
Given the information below, which bonds) will be issued at a discount Bond 1 Bond 2...
Given the information below, which bonds) will be issued at a discount Bond 1 Bond 2 Bond 4 Stated Rate of Return Market Rate of Return Bond 3 12% 14% Multiple Choice Bond 3 0 Bonds 2 and 3 0 Bond 4 0
Given the information below, which bond(s) will be issued at a discount? Stated Rate of Return...
Given the information below, which bond(s) will be issued at a discount? Stated Rate of Return Market Rate of Return Bond 1 7% 5% Bond 2 8% 8% Bond 3 12% 14% Bond 4 9% 11% Bond 3. Bond 4. Bonds 3 and 4 Tony Hawk's Adventure (THA) issued callable bonds on January 1, 2021. THA's accountant has projected the following amortization schedule from issuance until maturity Interest Expense Increase in value Carrying Value Cash Paid Date 01/01/2021 06/30/2021 12/31/2021...
Required information P10-10 Preparing a Bond Amortization Schedule for a Bond Issued at a Premium LO10-5...
Required information P10-10 Preparing a Bond Amortization Schedule for a Bond Issued at a Premium LO10-5 (The following information applies to the questions displayed below.) On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective interest amortization method. The partially completed amortization schedule below pertains to the bonds: Cash Interest Amortization Date January 1, Year 1 End of...
1. Assuming that a bond is originally issued at a premium, the carrying value of the bond liability will decrease over t...
1. Assuming that a bond is originally issued at a premium, the carrying value of the bond liability will decrease over the life of the bond. This statement is True or False 2.On January 1, Year 1 Residence Company issued bonds with a $50,000 face value. The bonds were issued at 96 resulting in a 4% discount. They had a 20 year term and a stated rate of interest of 7%. Based on this information, the carrying value of the...
Exercise 6: Complete the following example for a bond issued at a price of 106. T-accts below The...
Exercise 6: Complete the following example for a bond issued at a price of 106. T-accts below The same bond from Exercise 4 is issued at a price of 106. This price indicates that the Effective rate of interest is less than the Stated rate of interest. As a result, the bond issues at a Premium 1. Entry required upon issuance of the bond Cash proceeds: $ Note: Even though a Premium is recorded, the company must still repay just...
Required information P10-10 Preparing a Bond Amortization Schedule for a Bond Issued at a Premium LO10-5...
Required information P10-10 Preparing a Bond Amortization Schedule for a Bond Issued at a Premium LO10-5 The following information applies to the questions displayed below.) On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective interest amortization method. The partially completed amortization schedule below pertains to the bonds: Canh Interest Amortization Date January 1, Year 1 End of...
McMillan company issued a 300000 bond with a stated rate of 8%. which of the following...
McMillan company issued a 300000 bond with a stated rate of
8%. which of the following is a possible term of cash
recieved
5) McMillan Company issued a $300,000 bond with a state rate of 8%. Which of the following is a possibility in terms of cash received when the bond was issued? a McMillan Company received $263,700. The effective/market interest rate was 7%. 6) McMillan Company received $272,900. The effective/market interest rate was 9%. 270,000 c) McMillan Company received...
Required information P10-10 Preparing a Bond Amortization Schedule for a Bond Issued at a Premium LO10-5...
Required information P10-10 Preparing a Bond Amortization Schedule for a Bond Issued at a Premium LO10-5 [The following information applies to the questions displayed below.) On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective interest amortization method. The partially completed amortization schedule below pertains to the bonds: Cash Interest Amortization Date January 1, Year 1 End of...
Required information P10-10 Preparing a Bond Amortization Schedule for a Bond Issued at a Premium L010-5...
Required information P10-10 Preparing a Bond Amortization Schedule for a Bond Issued at a Premium L010-5 The following information applies to the questions displayed below,. On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective-interest amortization method. The partially completed amortization schedule below pertains to the bonds: Date Amortization Cash Interest Balance January 1, Year 1 End of...
1. On January 1, Year 1, Price Co. issued $393,000 of five-year, 6 percent bonds at...
1. On January 1, Year 1, Price Co. issued $393,000 of five-year,
6 percent bonds at 95. Interest is payable annually on December 31.
The discount is amortized using the straight-line method.
Required
Prepare the journal entries to record the bond transactions for
Year 1 and Year 2.
- Record the entry for issuance of bonds
-Record the entry for recognizing interest expense on Dec. 31,
Year 1
-Record the entry for recognizing interest expense on Dec. 31,
Year...
Given the information below, which bonds) will be issued at a discount Bond 1 Bond 2 Bond 4 Stated Rate of Return Market Rate of Return Bond 3 12% 14% Multiple Choice Bond 3 0 Bonds 2 and 3 0 Bond 4 0
Given the information below, which bond(s) will be issued at a discount? Stated Rate of Return Market Rate of Return Bond 1 7% 5% Bond 2 8% 8% Bond 3 12% 14% Bond 4 9% 11% Bond 3. Bond 4. Bonds 3 and 4 Tony Hawk's Adventure (THA) issued callable bonds on January 1, 2021. THA's accountant has projected the following amortization schedule from issuance until maturity Interest Expense Increase in value Carrying Value Cash Paid Date 01/01/2021 06/30/2021 12/31/2021...
Required information P10-10 Preparing a Bond Amortization Schedule for a Bond Issued at a Premium LO10-5 (The following information applies to the questions displayed below.) On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective interest amortization method. The partially completed amortization schedule below pertains to the bonds: Cash Interest Amortization Date January 1, Year 1 End of...
Exercise 6: Complete the following example for a bond issued at a price of 106. T-accts below The same bond from Exercise 4 is issued at a price of 106. This price indicates that the Effective rate of interest is less than the Stated rate of interest. As a result, the bond issues at a Premium 1. Entry required upon issuance of the bond Cash proceeds: $ Note: Even though a Premium is recorded, the company must still repay just...
Required information P10-10 Preparing a Bond Amortization Schedule for a Bond Issued at a Premium LO10-5 The following information applies to the questions displayed below.) On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective interest amortization method. The partially completed amortization schedule below pertains to the bonds: Canh Interest Amortization Date January 1, Year 1 End of...
McMillan company issued a 300000 bond with a stated rate of
8%. which of the following is a possible term of cash
recieved
5) McMillan Company issued a $300,000 bond with a state rate of 8%. Which of the following is a possibility in terms of cash received when the bond was issued? a McMillan Company received $263,700. The effective/market interest rate was 7%. 6) McMillan Company received $272,900. The effective/market interest rate was 9%. 270,000 c) McMillan Company received...
Required information P10-10 Preparing a Bond Amortization Schedule for a Bond Issued at a Premium LO10-5 [The following information applies to the questions displayed below.) On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective interest amortization method. The partially completed amortization schedule below pertains to the bonds: Cash Interest Amortization Date January 1, Year 1 End of...
Required information P10-10 Preparing a Bond Amortization Schedule for a Bond Issued at a Premium L010-5 The following information applies to the questions displayed below,. On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective-interest amortization method. The partially completed amortization schedule below pertains to the bonds: Date Amortization Cash Interest Balance January 1, Year 1 End of...
1. On January 1, Year 1, Price Co. issued $393,000 of five-year,
6 percent bonds at 95. Interest is payable annually on December 31.
The discount is amortized using the straight-line method.
Required
Prepare the journal entries to record the bond transactions for
Year 1 and Year 2.
- Record the entry for issuance of bonds
-Record the entry for recognizing interest expense on Dec. 31,
Year 1
-Record the entry for recognizing interest expense on Dec. 31,
Year...
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