Sunland issued $320,000 of 5%, 5-year bonds on January 1, 2021.
Interest is payable semi-annually.
Calculate the price of the bond: (a) 4%, (b) 5%, and (c) 6%.
(For calculation purposes, use 5 decimal places as
displayed in the factor table provided. Round final answer to 0
decimal places, e.g. 5,275.)
Click here to view the factor table. Present Value of 1
Click here to view the factor table. Present Value of an Annuity of
1
(a) |
Market interest rate 4% |
$enter a dollar amount rounded to 0 decimal places | |
---|---|---|---|
(b) |
Market interest rate 5% |
$enter a dollar amount rounded to 0 decimal places | |
(c) |
Market interest rate 6% |
$enter a dollar amount rounded to 0 decimal places |
Prepare the journal entry to record the issuance of the bond
assuming the market rate of interest is: (a) 4%, (b) 5%, and (c)
6%. (Credit account titles are automatically indented
when the amount is entered. Do not indent manually. If no entry is
required, select "No Entry" for the account titles and enter 0 for
the amounts.)
No. |
Account Titles and Explanation |
Debit |
Credit |
---|---|---|---|
(a) |
enter an account title to record issuance of bonds |
enter a debit amount |
enter a credit amount |
enter an account title to record issuance of bonds |
enter a debit amount |
enter a credit amount |
|
(To record issuance of bonds.) | |||
(b) |
enter an account title to record issuance of bonds |
enter a debit amount |
enter a credit amount |
enter an account title to record issuance of bonds |
enter a debit amount |
enter a credit amount |
|
(To record issuance of bonds.) | |||
(c) |
enter an account title to record issuance of bonds |
enter a debit amount |
enter a credit amount |
enter an account title to record issuance of bonds |
enter a debit amount |
enter a credit amount |
|
(To record issuance of bonds.) |
Sunland issued $320,000 of 5%, 5-year bonds on January 1, 2021. Interest is payable semi-annually. Calculate...
Sunland issued $320,000 of 5%, 5-year bonds on January 1, 2021. Interest is payable semi-annually. Calculate the price of the bond: (a) 4%, (b) 5%, and (c) 6%. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answer to 0 decimal places, e.g. 5,275.) Click here to view the factor table. Present Value of 1 Click here to view the factor table. Present Value of an Annuity of 1 (a) Market interest rate...
On January 1, 2020, Wildhorse Ltd. issued 870 5-year, 10% convertible bonds at par of $1,000, with interest payable each December 31. Each bond is convertible into 100 common shares, and the current fair value of each common share is $6. Similar straight bonds carry an interest rate of 12%. Calculate the PV of the debt component by itself. Calculate using any of the following methods: (1) factor tables, (2) a financial calculator, or (3) Excel function PV. (For calculation...
On January 1, 2020, Blue Company purchased 8% bonds having a maturity value of $320,000, for $346,959.62. The bonds provide the bondholders with a 6% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Blue Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category. Part 1 Prepare the journal entry at the date of the bond purchase. (Enter...
Blossom Company issued $ 516,000, 7%, 30-year
bonds on January 1, 2017, at 103. Interest is payable
annually on January 1. Blossom uses straight-line amortization for
bond premium or discount.
Prepare the journal entries to record the following events.
(Credit account titles are automatically indented when
amount is entered. Do not indent manually.)
(a)
The issuance of the bonds.
(b)
The accrual of interest and the premium amortization on
December 31, 2017.
(c)
The payment of interest on January 1, 2018.
(d)
The...
On January 1, 2020, Pina Colada Corp. acquires $310,000 of
Spider Products Inc. 9% bonds at a price of $294,849. The interest
is payable each December 31, and the bonds mature on December 31,
2022. The investment will provide Pina Colada Corp. with a 11%
yield. Pina Colada Corp. applies IFRS and accounts for this
investment using the amortized cost model.
Prepare a three-year bond amortization schedule.
(Round answers to 0 decimal places, e.g.
5,275.)
Schedule of Interest Income
and...
please help me solve this question
Blossom Cars Co. issued $2.16 million of 5%, 5-year bonds on January 1, 2021. The bonds were dated January 1 and pay interest annually. The bonds are secured with real estate holdings. The market interest rate was 4% for these bonds. Blossom has a calendar year end. Click here to view the factor table. Present Value of 1 Click here to view the factor table. Present Value of an Annuity of 1 Calculate the...
Grouper Company issued $492,000 of 10%, 20-year bonds on January
1, 2020, at 102. Interest is payable semiannually on July 1 and
January 1. Grouper Company uses the effective-interest method of
amortization for bond premium or discount. Assume an effective
yield of 9.7705%.
Prepare the journal entries to record the following.
(Round intermediate calculations to 6 decimal places,
e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548. If
no entry is required, select "No Entry" for the account...
Flint Corporation issued 2,000 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant. After issuance, the bonds were selling in the market at 98, and the warrants had a market price of $39. Use the proportional method to record the issuance of the bonds and warrants. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for...
Blossom Corporation issues 2,100 convertible bonds at January 1, 2019. The bonds have a 3-year life, and are issued at par with a face value of $1,000 per bond, giving total proceeds of $2,100,000. Interest is payable annually at 6%. Each bond is convertible into 250 ordinary shares (par value of $1). When the bonds are issued, the market rate of interest for similar debt without the conversion option is 7%. Click here to view factor table. Compute the liability...
Harvard Inc. issues $4.0 million, 5-year, 8% bonds at 102, with interest payable on January 1. The straight-line method is used to amortize bond premium. Prepare the journal entry to record the sale of these bonds on January 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 Cash enter a debit amount Bonds Payable $4,000,000 Premium on Bonds Payable enter a credit amount Prepare...