Homework Answers
| Issue price of the bond | 10976 |
| X Market Interest rate | 4% |
| Interest expense for the first year | 439.04 |
| Option A $439.04 is correct |
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On January 1, Melrose Manufacturing issues a 5-year bond with a face value of $10,000 and...
On January 1, your company issues a 5-year bond with a face value of $10,000 and...
On January 1, your company issues a 5-year bond with a face value of $10,000 and a stated interest rate of 9% The market interest rate is 7%. The issue price of the bond was $11,046. Using the effective-interest method of amortization, the interest expense for the first year ended December 31 would be: Multiple Choice $700.00. $900.00. $994.14 $773.22
On January 1, your company issues a 5-year bond with a foce value of $10,000 and...
On January 1, your company issues a 5-year bond with a foce value of $10,000 and a stated interest rate of 6%. The market interest rate is 4%. The issue price of the bond was $10,896. Your company used the effective interest method of amortization. At the end of the first year, your company should Multiple Choice Ο debit interest Expense for $600. debit Premium on Bonds Payable for $16400 and credit interest Payable for $436 00 Ο debt interest...
On January 1, 2019, Tonika Company issued a six-year, $10,000, 6% bond. The interest is payable...
On January 1, 2019, Tonika Company issued a six-year, $10,000, 6% bond. The interest is payable annually each December 31. The issue price was $9,523 based on an 7% effective interest rate. Tonika uses the effective-interest amortization method. The interest expense on the income statement for the year ended December 31, 2019 is closest to: Multiple Choice O $780. O $571. O $600. o $667
On January 1, 2019, Tonika Company issued a seven-year, $10,000, 8% bond. The interest is payable...
On January 1, 2019, Tonika Company issued a seven-year, $10,000, 8% bond. The interest is payable annually each December 31. The issue price was $9,496 based on an 9% effective interest rate. Tonika uses the effective-interest amortization method. The interest expense on the income statement for the year ended December 31, 2019 is closest to: Multiple Choice $855. $972. o $800. o o $760.
On January 1, 2018, Methodical Manufacturing issued 100 bonds, each with a face value of $1,000,...
On January 1, 2018, Methodical Manufacturing issued 100 bonds, each with a face value of $1,000, a stated interest rate of 5 percent paid annually on December 31, and a maturity date of December 31, 2020. On the issue date, the market interest rate was 4.25 percent, so the total proceeds from the bond issue were $102,070. Methodical uses the effective-interest bond amortization method and adjusts for any rounding errors when recording interest in the final year. Required: 1. Prepare...
On January 1, 2018, Surreal Manufacturing issued 620 bonds, each with a face value of $1,000,...
On January 1, 2018, Surreal Manufacturing issued 620 bonds, each with a face value of $1,000, a stated interest rate of 3 percent paid annually on December 31, and a maturity date of December 31, 2020. On the issue date, the market interest rate was 4 percent, so the total proceeds from the bond issue were $602,797. Surreal uses the effective-interest bond amortization method and adjusts for any rounding errors when recording interest in the final year. Required: 1. Prepare...
On January 1, 2018, Surreal Manufacturing issued 630 bonds, eachwith a face value of $1,000,...
On January 1, 2018, Surreal Manufacturing issued 630 bonds, each
with a face value of $1,000, a stated interest rate of 3 percent
paid annually on December 31, and a maturity date of December 31,
2020. On the issue date, the market interest rate was 4 percent, so
the total proceeds from the bond issue were $612,519. Surreal uses
the effective-interest bond amortization method and adjusts for any
rounding errors when recording interest in the final year.Required:1. Prepare a bond...
On January 1, 2018, Methodical Manufacturing issued 100 bonds, each with a face value of $1,000,...
On January 1, 2018, Methodical Manufacturing issued 100 bonds, each with a face value of $1,000, a stated interest rate of 5 percent paid annually on December 31, and a maturity date of December 31, 2020. On the issue date, the market interest rate was 4.00 percent, so the total proceeds from the bond issue were $102,776. Methodical uses the simplified effective interest bond amortization method and adjusts for any rounding errors when recording interest in the final year. Required:...
Edna Company issues a 5 year, 5% face rate $100,000 bond on January 1, 2016, with...
Edna Company issues a 5 year, 5% face rate $100,000 bond on January 1, 2016, with interest payable each December 31. The bond is sold to yield 5.2% annual and the issue costs are $200. Calculate the price at which the bond sold on the market. Calculate the bond’s effective interest rate (including issue costs. Prepare an amortization table covering 2016 and 2017 All of the bonds are retired on July 1, 2017. The price paid reflects a market interest...
On January 1, 2018, Methodical Manufacturing issued 100 bonds, each with a face value of $1,000,...
On January 1, 2018, Methodical Manufacturing issued 100 bonds, each with a face value of $1,000, a stated interest rate of 5 percent paid annually on December 31, and a maturity date of December 31, 2020. On the issue date, the market interest rate was 4.25 percent, so the total proceeds from the bond issue were $102,070. Methodical uses the effective-interest bond amortization method and adjusts for any rounding errors when recording interest in the final year. Required: 1. Prepare...
On January 1, your company issues a 5-year bond with a face value of $10,000 and a stated interest rate of 9% The market interest rate is 7%. The issue price of the bond was $11,046. Using the effective-interest method of amortization, the interest expense for the first year ended December 31 would be: Multiple Choice $700.00. $900.00. $994.14 $773.22
On January 1, your company issues a 5-year bond with a foce value of $10,000 and a stated interest rate of 6%. The market interest rate is 4%. The issue price of the bond was $10,896. Your company used the effective interest method of amortization. At the end of the first year, your company should Multiple Choice Ο debit interest Expense for $600. debit Premium on Bonds Payable for $16400 and credit interest Payable for $436 00 Ο debt interest...
On January 1, 2019, Tonika Company issued a six-year, $10,000, 6% bond. The interest is payable annually each December 31. The issue price was $9,523 based on an 7% effective interest rate. Tonika uses the effective-interest amortization method. The interest expense on the income statement for the year ended December 31, 2019 is closest to: Multiple Choice O $780. O $571. O $600. o $667
On January 1, 2019, Tonika Company issued a seven-year, $10,000, 8% bond. The interest is payable annually each December 31. The issue price was $9,496 based on an 9% effective interest rate. Tonika uses the effective-interest amortization method. The interest expense on the income statement for the year ended December 31, 2019 is closest to: Multiple Choice $855. $972. o $800. o o $760.
On January 1, 2018, Surreal Manufacturing issued 630 bonds, each
with a face value of $1,000, a stated interest rate of 3 percent
paid annually on December 31, and a maturity date of December 31,
2020. On the issue date, the market interest rate was 4 percent, so
the total proceeds from the bond issue were $612,519. Surreal uses
the effective-interest bond amortization method and adjusts for any
rounding errors when recording interest in the final year.Required:1. Prepare a bond...
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