OfficeMax, Inc. issued 20-year bonds today for $936 and pay interest semiannually. Investors require a rate...
EKM, Inc issued 8%, 3-year bonds with a par value of $250,000 that pay interest semiannually. The bond was issued at market rate. The journal entry to record each semiannual interest payment is: Debit Bond Interest Expense $10,000; credit Cash $10,000. Debit Bond Interest Expense $20,000; credit Cash $20,000. Debit Cash $20,000; credit Bond Interest Expense $20,000. Debit Bond Interest Payable $25,000; credit Cash $25,000. No entry is needed, since no interest is paid until the bond is due.
Question 2 Brookline, Inc. just sold an issue of 30-year bonds for $1,107.20. Investors require a rate of return on these bonds of 7.75%. The bonds pay interest semiannually. What is the coupon rate of the bonds stated in annual percentage rate (APR)? [Total: 6 marks]
On January 1, 2015, Stronger Industries issued $480,000 of 9%, five-year bonds that pay interest semiannually on June 30 and December 31. They are issued at $499,483 and their market rate is 8% at the issue date. After recording the entry for the issuance of the bonds, Bonds Payable had a balance of $480,000 and Premium on Bonds Payable had a balance of $19,483. Stroger uses the effective interest bond amortization method. The first semiannual interest payment was made on...
A company issued 9%, 15-year bonds with a par value of $560,000 that pay interest semiannually. The market rate on the date of issuance was 9%. The journal entry to record each semiannual interest payment is: Multiple Choice Debit Bond Interest Expense $25,200 Credit Cash $25,200. Debit Bond Interest Expense $50,400; credit Cash $50.400. Debit Bond Interest Payable $37,333, credit Cash $37,333 Debit Bond Interest Expense $510,000; credit Cash $510,000,
A company issued 7%, 15-year bonds with a par value of $600,000 that pay interest semiannually. The market rate on the date of issuance was 7%. The journal entry to record each semiannual interest payment is: Multiple Choice Debit Bond Interest Expense $21,000; credit Cash $21,000. 0 Debit Bond Interest Expense $550,000, credit Cash $550,000. Debit Bond Interest Expense $42,000 credit Cash $42,000, Debit Bond Interest Payable $40,000; credit Cash $40,000.No entry is needed, since no interest is paid until the bond is due.
On January 1, 2017, Learned Inc, issued $16 million face amount of 20-year, 18% stated rate bonds when market interest rates were 20%. The bonds pay interest semiannually each June 30 and December 31 and mature on December 31, 2036. Calculate the proceeds (issue price) of Learned Inc.’s, bonds on January 1, 2017, if the bonds were sold to provide a market rate of return to the investor. Assume instead that the proceeds were $16,411,000. Record the journal entry to...
Morgan Company issues 9%, 20-year bonds with a par value of $840,000 that pay interest semiannually. The amount paid to the bondholders for each semiannual interest payment is. 21 Multiple Choice points (8 02:14:26 O $75,600 O $37,800. O $67,200 O $33,600. 0 $420,000
General Electric issued 8%, 15-year bonds with a par value of $450,000 that pay interest semiannually. The market rate on the date of issuance was 8%. The journal entry to record each semiannual interest payment is: Multiple Choice 0 O Debit Bond Interest Expense $36,000; credit Cash $36,000. 0 Debit Bond Interest Payable $30,000; credit Cash $30,000. O No entry is needed, since no interest is paid until the bond is due. C) Debit Bond Interest Expense $18,000; credit Cash...
Legacy issues $710,000 of 8.0%, four year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. They are issued at $621,812 and their market rate is 12% at the issue date. 2. Determine the total bond interest expense to be recognized over the bonds' life. Total bond interest expense over life of bonds: Amount repaid payments of Par value at maturity Total repaid Less amount borrowed Total bond interest expense Legacy issues $710,000 of...
Amortize Discount by Interest Method On the first day of its fiscal year, Ebert Company issued $18,000,000 of 5-year, 10% bonds to finance its operations. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 11%, resulting in Ebert Company receiving cash of $17,321,607. The company uses the interest method. a. Journalize the entries to record the following: 1. Sale of the bonds. Round amounts to the nearest dollar. For a compound transaction, if an...