ZuoTi.Pro
Question

A company issued the following semi-annual bonds: Face amount: $150,000 Coupon rate: 6% Yield: 4 % Life: 15 years
C. Prepare the amortization schedule for only the first two interest periods using the interest method. CASH INTEREST EXPENSE
business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

(d)-The journal entry to record the first interest payment on the Bond

Accounts Tittles and explanations

Debit ($)

Credit ($)

Interest Expenses A/c

3,672

Premium on Bond Payable A/c

828

   To Cash A/c

4,500

[Being the Journal entry passed to record interest payment]

Cash Paid = $4,500 [$150,000 x 6.00% x ½]

Interest Expense = $3,672 [$183,595 x 4.00% x ½]

Premium on Bond Payable amortization = 828 [$4,500 - $3,672]

0 0
Add a comment
Know the answer?
Add Answer to:
A company issued the following semi-annual bonds: Face amount: $150,000 Coupon rate: 6% Yield: 4 %...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • A company issued the following semi-annual bonds:       Face amount:   $150,000       Coupon rate:     6 %...

    A company issued the following semi-annual bonds:       Face amount:   $150,000       Coupon rate:     6 %       Yield:                   4 %       Life:                   15 years a. Compute the selling price of the bonds. Prepare the journal entry for the issuance of the bonds using the selling price from part (a).                                                c. Prepare the amortization schedule for only the first two interest periods using the interest      method.     CASH                  INTEREST EXPENSE                   AMORTIZATION                        BOOK VALUE d. Prepare the journal entry to record...

  • Part C A company issued the following semi-annual bonds: Face amount: $150,000 Coupon rate: 6% Yield:...

    Part C A company issued the following semi-annual bonds: Face amount: $150,000 Coupon rate: 6% Yield: 4% Life: 15 years a. Compute the selling price of the bonds. b. Prepare the journal entry for the issuance of the bonds using the selling price from part (a). C. Prepare the amortization schedule for only the first two interest periods using the interest method. CASH INTEREST EXPENSE AMORTIZATION BOOK VALUE

  • Hopkins Ltd. issued five-year bonds with a face value of $150,000 on January 1. The bonds...

    Hopkins Ltd. issued five-year bonds with a face value of $150,000 on January 1. The bonds have a coupon interest rate of 6% and interest is paid semi-annually on June 30 and December 31. The market interest rate was 7% when the bonds were issued at a price of 96 Using above information, determine the proceeds received by the company when the bonds were issued. Proceeds from issue of the bonds LINK TO TEXT Determine the interest expense recorded for...

  • QUESTION 9 A semi-annual bond having the following was issued by a corporation: $200,000 face amount...

    QUESTION 9 A semi-annual bond having the following was issued by a corporation: $200,000 face amount 10% coupon rate 8 % yield 10 years What is the semi-annual interest payment on the bond?

  • On January 1, 2019, Company C. issued five-year bonds with a face value of $500,000 and...

    On January 1, 2019, Company C. issued five-year bonds with a face value of $500,000 and a coupon interest rate of 6%, with interest payable semi-annually. 1. Prepare a partial bond amortization table for the first two interest payments assuming that interest is paid on July 1 and January 1 and that the bonds sold based on the following scenario. 2. Record the journal entries relating to the bonds on January 1, July 1, and December 31 Market Rate 7%...

  • On January 1, 2019. Company C. issued five-year bonds with a face value of $500,000 and...

    On January 1, 2019. Company C. issued five-year bonds with a face value of $500,000 and a coupon interest rate of 6%, with interest payable semi-annually. 1. Prepare a partial bond amortization table for the first two interest payments assuming that interest is paid on July 1 and January 1 and that the bonds sold based on the following scenario 2. Record the journal entries relating to the bonds on January 1, July 1, and December 31 Market Rate 5%...

  • ABC issued 12-year bonds at a coupon rate of 8% with semi-annual payments. If the bond...

    ABC issued 12-year bonds at a coupon rate of 8% with semi-annual payments. If the bond currently sells for $1050 of par value, what is the YTM? ABC issued 12-year bonds 2 years ago at a coupon rate of 8% with semi-annual payments. If the bond currently sells for 105% of par value, what is the YTM? A bond has a quoted price of $1,080.42. It has a face value of $1000, a semi-annual coupon of $30, and a maturity...

  • Corp-X issued corporate bonds one year ago at par with a face value of $1000, an annual coupon rate of 6%(paid semi annually), and a 20 years to maturity. At the moment, bonds of equivalent risk and m...

    Corp-X issued corporate bonds one year ago at par with a face value of $1000, an annual coupon rate of 6%(paid semi annually), and a 20 years to maturity. At the moment, bonds of equivalent risk and maturity to these Corp-X bonds are being issued at par with a coupon rate of 5.5% per year(paid semi annually) 1. At the time that Corp-X bonds were issued, what was the Yield to Maturity of the bonds? And What is the current...

  • Anderson/ Thurow Company issued $1,000,000 of five year bonds on Jan 1, 20X1. The bonds carried...

    Anderson/ Thurow Company issued $1,000,000 of five year bonds on Jan 1, 20X1. The bonds carried a face or coupon rate of 12% with interest to be paid semi-annually on June 30th and Dec 31st. At the issuance date, the market interest rate for such bonds was 10%. A. Calculate the issuance price for the bonds and show the journal entry to record their issuance. B. Provide an amortization table for the first two periods. C. Show the journal entries...

  • III. Bonds Payable issue and amortization       Carson Company issued $1,000,000 of corporate bonds on January...

    III. Bonds Payable issue and amortization       Carson Company issued $1,000,000 of corporate bonds on January 1, 2016. The bonds have a stated rate of 4 percent, and a 10 year life. The bonds were issued to yield 3 percent. The bonds pay interest annually, each December 31, starting December 31, 2016.             Calculate the issue price of the bonds at 1/1/16. Show your assumptions for your calculations. Prepare an amortization schedule for the bonds through December 31, 2017. Prepare...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT