Homework Answers
| Rate | Semi annual Market Interest=(8/2)% | 4.00% | ||||||||
| Nper | Number of Semi annual period | 10 | (5*2) | |||||||
| Pmt | Semi annual Coupon Payment (10*$1000*10%)/2 | $500 | ||||||||
| FV | Payment at maturity | $10,000 | ||||||||
| PV | Bond Issue Price | $10,811 | (Using PV function of excel with Rate=4%, Nper=10, Pmt=-500, Fv=-10000) | |||||||
| FV-PV | Bond Premium (10811-10000) | $811 | ||||||||
| AMORTIZATION SCHEDULE | ||||||||||
| (10/2)=5% *10000 | Market rate(8/2)=4% *Previous Book value | |||||||||
| A | B | C | D=B-C | E | F | G=F+E | ||||
| Date | Interest payment | Interest Expense | Amortization of Premium | Credit Balance in Bond Premium Account | Credit Balance in Bond Payable Account | Book value of the Bond | ||||
| Jan1,2017 | $811 | $10,000 | $10,811 | |||||||
| June30,2017 | $500 | $432.44 | $67.56 | $743.53 | $10,000 | $10,744 | ||||
| Dec31,2017 | $500 | $429.74 | $70.26 | $673.27 | $10,000 | $10,673 | ||||
| June30,2018 | $500 | $426.93 | $73.07 | $600.21 | $10,000 | $10,600 | ||||
| Dec31,2018 | $500 | $424.01 | $75.99 | $524.21 | $10,000 | $10,524 | ||||
| June30,2019 | $500 | $420.97 | $79.03 | $445.18 | $10,000 | $10,445 | ||||
| Dec31,2019 | $500 | $417.81 | $82.19 | $362.99 | $10,000 | $10,363 | ||||
| June30,2020 | $500 | $414.52 | $85.48 | $277.51 | $10,000 | $10,278 | ||||
| Dec31,2020 | $500 | $411.10 | $88.90 | $188.61 | $10,000 | $10,189 | ||||
| June30,2021 | $500 | $407.54 | $92.46 | $96.15 | $10,000 | $10,096 | ||||
| Dec31,2021 | $500 | $403.85 | $96.15 | $0.00 | $10,000 | $10,000 | ||||
| JOURNAL ENTRY ON JANUARY 1, 2017 | ||||||||||
| ACCOUNT TITLES | DEBIT | CREDIT | ||||||||
| Cash | $10,811 | |||||||||
| Bonds Payable | $10,000 | |||||||||
| Bond Premium | $811 | |||||||||
| JOURNAL ENTRY ON JUNE 30, 2017 | ||||||||||
| ACCOUNT TITLES | DEBIT | CREDIT | ||||||||
| Interest Expenses | $432.44 | |||||||||
| Bond Premium | $67.56 | |||||||||
| Cash | $500.00 | |||||||||
| JOURNAL ENTRY ON DECEMBER 31, 2017 | ||||||||||
| ACCOUNT TITLES | DEBIT | CREDIT | ||||||||
| Interest Expenses | $429.74 | |||||||||
| Bond Premium | $70.26 | |||||||||
| Cash | $500.00 | |||||||||
 |
||||||||||
Add Answer to:
In Class Problem Tower Company issues 10,$1,000 term bonds on January 1, 2017, With a 5...
On January 1, 2017, Brussels Enterprises issues bonds at par dated January 1, 2017, that have...
On January 1, 2017, Brussels Enterprises issues bonds at par dated January 1, 2017, that have a $3,400 000 par value, mature in 4 years, and pay 9% interest semiannually on June 30 and December 31. 1. Record the entry for the issuance of bonds for cash on January 1, 2017. 2. Record the entry for the first semiannual interest payment on June 30, 2017. 3. Record the entry for the second semiannual interest payment on December 31, 2017. 4....
On January 1, 2017, Boston Enterprises issues bonds that have a $1,750,000 par value, mature in...
On January 1, 2017, Boston Enterprises issues bonds that have a $1,750,000 par value, mature in 20 years, and pay 10% interest semiannually on June 30 and December 31. The bonds are sold at par. 1. How much interest will Boston pay (in cash) to the bondholders every six months? 2. Prepare journal entries to record (a) the issuance of bonds on January 1, 2017; (b) the first interest payment on June 30, 2017; and (c) the second interest...
On January 1, 2019, a company issues a $500,000, 8%, 10-year bond that pays semiannual interest. (a) Prepare the general journal entry to record the issuance of the bonds on January 1,2019 the co...
On January 1, 2019, a company issues a $500,000, 8%, 10-year bond that pays semiannual interest. (a) Prepare the general journal entry to record the issuance of the bonds on January 1,2019 the company uses the effective interest method of amortization of any discount or premium on bonds. Prepare the June 30, 2019 and the second interest payment on December 31, 2019. general journal entry to record the first semiannual interest payment on Credit Debit Date
On January 1, 2019,...
Legacy issues $710,000 of 8.0%, four year bonds dated January 1, 2017, that pay interest semiannually...
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...
Stanford issues bonds dated January 1, 2017, with a par value of $254,000. The bonds’ annual...
Stanford issues bonds dated January 1, 2017, with a par value of $254,000. The bonds’ annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $241,104. Prepare an amortization table using the effective interest method to amortize the discount for these bonds.
Chowan Corporation issued $154,000 of 7% bonds dated January 1, 2016, for $148,815.79 on January 1,...
Chowan Corporation issued $154,000 of 7% bonds dated January 1, 2016, for $148,815.79 on January 1, 2016. The bonds are due December 31, 2019, were issued to yield 8%, and pay interest semiannually on June 30 and December 31. Chowan uses the effective interest method of amortization. Required: Prepare the journal entries to record the issue of the bonds on January 1, 2016, and the interest payments on June 30, 2016, December 31, 2016, and June 30, 2017. In addition,...
On January 1, 2017, Boston Enterprises issues bonds that have a $3,400,000 par value, mature in...
On January 1, 2017, Boston Enterprises issues bonds that have a $3,400,000 par value, mature in 20 years, and pay 9% interest semiannually on June 30 and December 31. The bonds are sold at par. 1. How much interest will Boston pay (in cash) to the bondholders every six months? 2. Prepare journal entries to record (a) the issuance of bonds on January 1, 2017; (b) the first interest payment on June 30, 2017; and (c) the second interest payment...
On January 1, 2017, Boston Enterprises issues bonds that have a $1,700,000 par value, mature in...
On January 1, 2017, Boston Enterprises issues bonds that have a $1,700,000 par value, mature in 20 years, and pay 9% interest semiannually on June 30 and December 31. The bonds are sold at par. 1. How much interest will Boston pay (in cash) to the bondholders every six months? 2. Prepare journal entries to record (a) the issuance of bonds on January 1, 2017; (b) the first interest payment on June 30, 2017; and (c) the second interest payment...
On January 1, 2017, Boston Enterprises issues bonds that have a $1,200,000 par value, mature in...
On January 1, 2017, Boston Enterprises issues bonds that have a $1,200,000 par value, mature in 20 years, and pay 9% interest semiannually on June 30 and December 31. The bonds are sold at par. 1. How much interest will Boston pay (in cash) to the bondholders every six months? 2. Prepare journal entries to record (a) the issuance of bonds on January 1, 2017; (b) the first interest payment on June 30, 2017; and (c) the second interest payment...
Hillside issues $2,600,000 of 5%, 15-year bonds dated January 1, 2017, that pay interest semiannually on...
Hillside issues $2,600,000 of 5%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,182,390. Required: 1. Prepare the January 1, 2017, journal entry to record the bonds' issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line premium amortization. 2(c) For each semiannual period, complete the...
On January 1, 2017, Brussels Enterprises issues bonds at par dated January 1, 2017, that have a $3,400 000 par value, mature in 4 years, and pay 9% interest semiannually on June 30 and December 31. 1. Record the entry for the issuance of bonds for cash on January 1, 2017. 2. Record the entry for the first semiannual interest payment on June 30, 2017. 3. Record the entry for the second semiannual interest payment on December 31, 2017. 4....
On January 1, 2019, a company issues a $500,000, 8%, 10-year bond that pays semiannual interest. (a) Prepare the general journal entry to record the issuance of the bonds on January 1,2019 the company uses the effective interest method of amortization of any discount or premium on bonds. Prepare the June 30, 2019 and the second interest payment on December 31, 2019. general journal entry to record the first semiannual interest payment on Credit Debit Date
On January 1, 2019,...
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...
Hillside issues $2,600,000 of 5%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,182,390. Required: 1. Prepare the January 1, 2017, journal entry to record the bonds' issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line premium amortization. 2(c) For each semiannual period, complete the...
Most questions answered within 3 hours.
-
Assume Kw = 1.01 ✕ 10−14
For pure water, we can calculate [H3O+ ] = [OH...
asked 16 minutes ago -
Suppose that on a temperature scale X, water boils at 203.0°X
and freezes at -105.7°X. What...
asked 1 hour ago -
BaS crystallizes in a cubic unit cell with S2- ions on each
corner and each face....
asked 1 hour ago -
A. 0≤P(Oi)≤10≤P(Oi)≤1 for each i
B. P(Oi)≤0P(Oi)≤0
C. P(Oi)=1+P(OCi)P(Oi)=1+P(OiC)
D. P(Oi)≥1P(Oi)≥1
If an experiment consists of...
asked 3 hours ago -
A battery has an emf of 9.20V and an internal resistance of 1.20
ohm. a)What resistance...
asked 3 hours ago -
The area of an elastic circular loop decreases at a constant
rate, dA/dt = −6.60×10−3 m2/s...
asked 4 hours ago -
The denaturation of proteins can be described by the
equilibrium
F⇌U
where F and U represent...
asked 5 hours ago -
Please answer what the maximum and minimum force is, and the
angle on the ion is...
asked 5 hours ago -
implement a program that reads a number of rows and a symbol.
The program will draw...
asked 5 hours ago -
Assume that when adults with smartphones are randomly selected,
45% use them in meetings or classes....
asked 5 hours ago -
Determine the number of formula units of
Na2SO4 and moles of oxygen contained in 8.11
moles...
asked 6 hours ago -
Explain in steps on the following code
What would be the output when executed
using System;...
asked 6 hours ago