Homework Answers
1) Journal entry
| Date | account and explanation | Debit | Credit |
| May 31 | Cash | 4500000 | |
| Bonds payable | 4500000 | ||
| Nov 30 | Interest expense (4500000*8%*6/12) | 180000 | |
| Cash | 180000 | ||
| Dec 31 | Interest expense | 30000 | |
| Interest payable | 30000 | ||
| May 31 | Interest payable | 30000 | |
| Interest expense | 150000 | ||
| Cash | 180000 | ||
2) Balance sheet presentation
| Current liabilities | ||
| Interest payable | 30000 | |
| Long term liabilities | ||
| Bonds payable | 4500000 | 4530000 |
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Req 1, and 2
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Environmental Concerns Limited (ECL) issued $500,000 of 10 year, 6.5% bonds payable at par value on May 1, 2018. The bonds pay interest each April 30 and October 31, and the company ends its accounting year on December 31. Requirements: 1. Fill in the blanks: a. ECL's bonds are priced at b. When ECL's issued its bonds, the market interest rate was 2. Journalize for ECL: a. Issuance of the bonds on May 1, 2018. b. Payment of...
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just need req 2
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b)
Payment of the semi-annual interest and the amortization of the
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On September 1, Parsons Company purchased $84,000, 10-year, 7% government bonds at 100 plus accrued interest. The semiannual interest payment dates are June 30 and December 31. Interest calculations are done by the month. Required: a. Journalize the entry to record the bond purchase. b. Journalize the receipt of interest on December 31 of the first year. c. Journalize the sale of the bonds on February 1 of the second year for $82,000 plus accrued interest. If an amount box...
Question 3 On January 31, 2016 Muscle Sports Cars issued 10-year, 4% bonds with a face...
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1
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Environmental Concerns Limited (ECL) issued $500,000 of 10 year, 6.5% bonds payable at par value on May 1, 2018. The bonds pay interest each April 30 and October 31, and the company ends its accounting year on December 31. Requirements: 1. Fill in the blanks: a. ECL's bonds are priced at b. When ECL's issued its bonds, the market interest rate was 2. Journalize for ECL: a. Issuance of the bonds on May 1, 2018. b. Payment of...
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just need req 2
A company issued 8%, 10-year bonds that mature on June 30, 2028. The bonds were issued on June 30, 2018. Interest is paid each June 30 and December 31 after issuance. Assume the straight-line amortization method Req 1 a premium If the market interest rate was 7% at issuance, the bonds were issued at a discount If the market interest rate was 9% at issuance, the bonds were issued at Req 2. Assume that $900,000 of...
1. If the market interest rate is 9% when Dolphin Corp. issues its bonds, will the bonds be priced at par, at a premium, or at a discount? Explain. If the market interest rate is 11% when Dolphin Corp. issues its bonds, will the bonds be priced at par, at a premium, or at a discount? Explain. Assume that the issue price of the bonds is 96. Journalize the following bonds payable transactions a. Issuance of the bonds on February...
Stephanie Ram Corporation have a $1,180,000 "bond issue" dated
February 1, 2016 due in 10 years with an annual interest rate of
15%. Interest is payable February 1 and August 1. On April 1, 2016,
the bond was sold for $1,097,400 plus accrued interest.
Using the straight-line method, prepare the general journal entries
for each of the following:
a)
The issuance of the bond on April 1, 2016.
b)
Payment of the semi-annual interest and the amortization of the
discount...
P14-34A Analyzing and journalizing bond transactions On January 1, 2016, Agricultural Credit Union (ACU) issued 7%, 20-year bonds payable with face value of $600,000. These bonds pay interest on June 30 and December 31. The issue price of the bonds is 104. Journalize the following bond transactions: a. Issuance of the bonds on January 1, 2016. b. Payment of interest and amortization on June 30, 2016. c. Payment of interest and amortization on December 31, 2016. d. Retirement of the...
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