EA2. LO 13.1 Beluga Inc. issued 10-year bonds with a face value of $100,000 and a...

Question

Question

EA2. LO 13.1 Beluga Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 3% when the market rate was

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

sale price of the bond = $100,000 *87.5%

=>$87,500.

The bonds are issued at discount.

Since the amount received is less than the face value, it can be said that the bonds are issued at discount.

Add a comment

Answer 2

Similar Homework Help Questions

EA2. LO 13.1 Beluga Inc. issued 10-year bonds with a face value of $100,000 and a...

EA2. LO 13.1 Beluga Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 3% when the market rate was 4%. Interest was paid annually. The bonds were sold at 87.5. What was the sales price of the bonds? Were they issued at a discount, a premium, or at par? EA3. LO 13.1 Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the market rate was...
On January 1, 2019, Conjecture Inc. issued 5-year bonds with a face value of $100,000 and...

On January 1, 2019, Conjecture Inc. issued 5-year bonds with a face value of $100,000 and an annual stated interest rate of 8%. Interest payments are made semi-annually on June 30th and December 31st. The bonds were issued for $108,530, when the market rate of interest was 6%. How much interest expense will Conjecture record for the six months July 1 - December 31, 2019?
EA9. LO 13.3 On Jan. 1, Year 1, Foxcroft Inc. issued 100 bonds with a face...

EA9. LO 13.3 On Jan. 1, Year 1, Foxcroft Inc. issued 100 bonds with a face value of $1,000 for $104,000. The bonds had a stated rate of 6% and paid interest semi-annually. What is the journal entry to record the first payment to the bondholders? EA10. LO 13.3 Pinetop Corporation issued $150,000 10-year bonds at par. The bonds have a stated rate of 6% and pay interest annually. What is the journal entry to record the sale of the...

EA6. LO 13.2 Oak Branch Inc. issued $700,000 of 5%, 10-year bonds when the market rate...

EA6. LO 13.2 Oak Branch Inc. issued $700,000 of 5%, 10-year bonds when the market rate was 4%. They received $757,243. Interest was paid semi-annually. Prepare an amortization table for the first three years of the bonds. EAZ. LO 13.3 On Jan. 1, Year 1, Foxcroft Inc. issued 100 bonds with a face value of $1,000 for $104,000. The bonds had a stated rate of 6% and paid interest semiannually. What is the journal entry to record the issuance of...
Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the market...

Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the market of interest was 9%. The company uses the effective-interest method of amortization. At the end of the year, the company will record ________. a credit to cash for $28,733 a debit to interest expense for $31,267 a debit to Discount on Bonds Payable for $1,267 a debit to Premium on Bonds Payable for $1.267
Bonds Bonus On June 30, 2014, Upton, Inc. sold $100,000 of 8% bonds for $102,530. The...

Bonds Bonus On June 30, 2014, Upton, Inc. sold $100,000 of 8% bonds for $102,530. The bonds are dated June 30, 2014, pay interest annually on June 30, and will mature on June 30, 2019. On the basis of the above information, answer the following questions. (Round your answer to the nearest dollar or percent if necessary.) 1. What is the stated (face value) interest rate for this bond issue? 2. Were the bonds issued at a premium or a...

On January 1, 2018, White, Inc. issues $1,000,000 total face value, 10-yr bonds with an annual...

On January 1, 2018, White, Inc. issues $1,000,000 total face value, 10-yr bonds with an annual stated interest rate of 5%. Interest is paid semi-annually on June 30th and December 31st. The company received $559,260 upon issuance. (Solutions posted online) Period Cash Paid Interest Expense Amortization of Discount/Premium Unamortized Premium/Discount Bonds Carrying Value (Book Value) Issuance Don’t use Don’t use Don’t use 6/30/2018 12/31/2018 6/30/2019 Are the bonds issued at a premium, a discount, or at face value? What is...
On January 1, 2012, Scott Corporation issued 10-year $100,000 bonds with a 6% stated rate of...

On January 1, 2012, Scott Corporation issued 10-year $100,000 bonds with a 6% stated rate of interest at 103. Scott Corporation pays the interest annually on December 31 and uses the straight-line amortization method. Which of the following is the correct general journal entry to record the interest expense for 2012? Debit Credit a. Interest Expense 6,000 Premium on Bonds Payable 300 Cash 5,700 b. Interest Expense 6,000 Cash 6,000 c. Interest Expense 6.300 Premium on Bonds Payable 300 Cash...
On January 1, 2018, Professors Credit Union (PCU) issued 7%, 20-year bonds payable with face value...

On January 1, 2018, Professors Credit Union (PCU) issued 7%, 20-year bonds payable with face value of $100,000. The bonds pay interest on June 30 and December 31. Read the requirements. Requirement 1. If the market interest rate is 5% when PCU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain. The 7% bonds issued when the market interest rate is 5% will be priced at 7. They are in...

Diaz Company issued $122,000 face value of bonds on January 1, 2018. The bonds had a...

Diaz Company issued $122,000 face value of bonds on January 1, 2018. The bonds had a 5 percent stated rate of interest and a ten-year term. Interest is paid in cash annually, beginning December 31, 2018. The bonds were issued at 99. The straight-line method is used for authorization. Determine the carrying value (face value less discount or plus premium) of the bond liability as of December 31, 2018. Determine the amount of interest expense reported on the 2018 income...

EA2. LO 13.1 Beluga Inc. issued 10-year bonds with a face value of $100,000 and a...

Homework Answers