Celine Dion Company issued $600,000 of 10%, 20-year bonds on
January 1, 2020, at 102. Interest is payable semiannually on July 1
and January 1. Celine Dion Company uses the effective-interest
method of amortization for bond premium or discount. Assume an
effective yield of 9.7705%.
Prepare the journal entries to record the following.(Round intermediate calculations to 6 decimal places,
e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548. If
no entry is required, select "No Entry" for the account titles and
enter 0 for the amounts. Credit account titles are automatically
indented when amount is entered. Do not indent
manually.)
(a) | The issuance of the bonds. | |
(b) | The payment of interest and related amortization on July 1, 2020. | |
(c) | The accrual of interest and the related amortization on December 31, 2020. |
List Of Accounts
Accumulated Depreciation-Equipment Accumulated Depreciation-Machinery Accumulated Depreciation-Plant and Equipment Allowance for Doubtful Accounts Bad Debt Expense Bond Issue Expense Bonds Payable Buildings Cash Common Stock Cost of Goods Sold Debt Investments Depreciation Expense Discount on Bonds Payable Discount on Notes Payable Discount on Notes Receivable Equipment Equity Investments Gain on Disposal of Machinery Gain on Disposal of Land Gain on Disposal of Plant Assets Gain on Redemption of Bonds Gain on Restructuring of Debt Gain on Sale of Machinery Interest Expense Interest Payable Interest Receivable Interest Revenue Inventory Land Loss on Disposal of Equipment Loss on Disposal of Land Loss on Redemption of Bonds Machinery Mortgage Payable No Entry Notes Payable Notes Receivable Paid-in Capital in Excess of Par - Common Stock Paid-in Capital in Excess of Par - Preferred Stock Premium on Bonds Payable Retained Earnings Salaries and Wages Expense Sales Sales Revenue Unamortized Bond Issue Costs Unearned Revenue Unearned Sales Revenue Unrealized Holding Gain or Loss - Equity Unrealized Holding Gain or Loss - Income |
Debit | Credit | |||
1/1/20 | Cash | 612000 | =600000*1.02 | |
Bonds payable | 600000 | |||
Premium on Bonds payable | 12000 | |||
7/1/20 | Interest expense | 29898 | =612000*9.7705%/2 | |
Premium on Bonds payable | 102 | |||
Cash | 30000 | =600000*10%/2 | ||
12/31/20 | Interest expense | 29893 | =(612000-102)*9.7705%/2 | |
Premium on Bonds payable | 107 | |||
Interest payable | 30000 | =600000*10%/2 |
Celine Dion Company issued $600,000 of 10%, 20-year bonds onJanuary 1, 2020, at 102. Interest...
Tamarisk Inc. issued $900,000 of 10.25%, 19-year bonds on January 1, 2020, at 102. Interest is payable semi-annually on July 1 and January 1. Tamarisk Inc. uses the effective interest method of amortization for any bond premium or discount. Assume an effective yield of 10.00%. (With a market rate of 10.00%, the issue price would be slightly higher. For simplicity, ignore this.) a) Prepare the journal entry to record the issuance of the bonds. (1/1/20) b) Prepare the journal entry...
McCormick Corporation issued a 4-year, $40,000, 5% note to Greenbush Company on January 1, 2020, and received a computer that normally sells for $31,495. The note requires annual interest payments each December 31. The market rate of interest for a note of similar risk is 12%. Prepare McCormick’s journal entries for (a) the January 1 issuance and (b) the December 31 interest. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the...
On January 1, 2020, Carter Company makes the two following acquisitions. 1. Purchases land having a fair value of $200,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $337,012. 2. Purchases equipment by issuing a 6%, 8-year promissory note having a maturity value of $250,000 (interest payable annually). The company has to pay 11% interest for funds from its bank. (a) Record the two journal entries that should be recorded by Carter Company for the two...
Celine Dion Company issued $600,000 of 10%, 20-year bonds on Juanuary 1, 2017, at 102. Interest is payable semiannually on July 1 and January 1. Dion Company uses the effective-interest method of amortization for bond premium or discount. Effective yield of 9.7705% Instructions: Prepare the journal entries to record the following (round to the nearest dollar) a). The issuance of the bonds b) The payment of interest and the related amortization on July 1, 2017 c) The accrual of interest...
(Entries for Bond Transactions—Straight-Line) Celine Dion Company issued $600,000 of 10%, 20-year bonds on January 1, 2020, at 102. Interest is payable semiannually on July 1 and January 1. Dion Company uses the straight-line method of amortization for bond premium or discount. A) Journalize the retirement of the bond at maturity Assume the same information as Celine Dion Company, except that Celine Dion Company uses the effective-interest method of amortization for bond premium or discount. Assume an eff ective yield...
On January 1, 2020, Indigo Corporation issued $687,000 of 8% bonds that are due in 10 years. The bonds were issued for $735,820 and pay interest each July 1 and January 1. The company uses the effective interest method. Assume an effective rate of 7%. (a) Prepare Indigo Corporation’s journal entry for the January 1 issuance. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for...
Pronghorn Ltd. sold $6,790,000 of 8% bonds, which were dated March 1, 2017, on June 1, 2017. The bonds paid interest on September 1 and March 1 of each year. The bonds' maturity date was March 1, 2027, and the bonds were issued to yield 10%. Pronghorn's fiscal year-end was February 28, and the company followed IFRS. On June 1, 2018, Pronghorn bought back $2,790,000 worth of bonds for $2,690,000 plus accrued interest. 1. Prepare the entry for the issuance...
On July 1, 2020 Sheridan Limited issued bonds with a face value of $980,000 due in 20 years, paying interest at a face rate of 10% on January 1 and July 1 each year. The bonds were issued to yield 11%. The company’s year-end was September 30. The company used the effective interest method of amortization. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF...
CALCULATOR pRİN TER VERSION | | . BACK FULL SCREEN NEXT Brief Exercise 14-6 On January 1, 2017, Marigold Corporation issued $520,000 of 7% $484,667, and pay interest each July 1 and January 1. Marigold uses the effective-interest method. bonds, due in 10 years. The bonds were issued for Prepare the company's journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Assume an effective-interest rate of 8%. (Round...
(Entries for Bond Transactions-straight line) Celine Dion-company issued $600,000 of 10%-20-year bonds on January 1, 2017 at 102. Interest is payable semiannually on July 1 and January 1. Dion company uses the straight-line method of amortization for bond premium or discount. Instructions: Prepare the journal entries to record the following: a) The issuance of the bonds b) The payment of interest and the related amortization on July 1, 2017 c) The accrual of interest and the related amortization on December...