ZuoTi.Pro
Question

Enterprise Group issued $100,000 of 4-year, 6% bonds outstanding on December 31, 2015 for $92,000. Enterprise...

Enterprise Group issued $100,000 of 4-year, 6% bonds outstanding on December 31, 2015 for $92,000. Enterprise uses straight-line amortization. On April 1, 2016, $50,000 of the bonds were retired at 97. What is the book value of the bonds sold on April 1?

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Solution:

Face value of bonds= $100,000,

Issue price of bonds= $92,000,

Discount on bonds = $100,000 - $92,000,

= $8,000,

Percentage of bonds retired = 50,000/100,000 = 0.5,

So discount on 8,000*0.5 = $4,000

Amortization of bonds $4,000/ 48 = 83.33 per month,

So on 1st April'2016 discount Amortized = 83 * 3,

= $249,

Book value of bonds on April 1,2016

Bonds Payable =$50,000

less:Discount on bonds = $ 4,000 - $249,

=$50,000 - $ 3,751,

=$46,249

Book value of bonds on April 1,2016 $46,249.

Please give a Positive Rating...

0 0
Add a comment
Know the answer?
Add Answer to:
Enterprise Group issued $100,000 of 4-year, 6% bonds outstanding on December 31, 2015 for $92,000. Enterprise...
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

  • Please answer A company issued 7%, 10-year bonds with a face amount of $189,000. The market...

    Please answer A company issued 7%, 10-year bonds with a face amount of $189,000. The market yield for bonds of similar risk and maturity is 6%. Interest is paid annually. What is the debit to cash for the bond proceeds? x Here are the PV and PVA factors PV i=6%, 10 periods .55839 PVA i=6%, 10 periods 7.36009 PV i=796, 10 periods 50835 PVA i=7%, 10 periods 7.02358 Question 2 O out of 0.5 points X Enterprise Group issued $100,000...

  • MSG Corporation issued $100,000 of 3-year, 6% bonds outstanding on December 31, 2020 for $106,000. The...

    MSG Corporation issued $100,000 of 3-year, 6% bonds outstanding on December 31, 2020 for $106,000. The bonds pay interest annually and MSG uses straight-line amortization. On May 1, 2021, $10,000 of the bonds were retired at 112. As a result of the retirement, MSG will report: Multiple Choice a $600 loss. a $667 loss. a $1,200 loss. a $1,200 gain.

  • MSG Corporation issued $102,000 of 3-year, 5% bonds outstanding on December 31, 2020 for $107,000. The...

    MSG Corporation issued $102,000 of 3-year, 5% bonds outstanding on December 31, 2020 for $107,000. The bonds pay interest annually and MSG uses straight-line amortization. On May 1, 2021, $10,200 of the bonds were retired at 112. As a result of the retirement, MSG will report: (Do not round intermediate calculations and round final answer to nearest whole dollar.) Multiple Choice a $724 loss. a $780 loss. a $1,448 loss. a $1,448 gain.

  • MSG Corporation has $1,000,000 of 10-year, 6% bonds outstanding on December 31, 2018. The bonds have...

    MSG Corporation has $1,000,000 of 10-year, 6% bonds outstanding on December 31, 2018. The bonds have 3 years remaining to maturity. Assume interest is paid at the end of each month. The unamortized premium remaining on these bonds was $60,000. MSG uses straight-line amortization, so the unamortized premium would be $40,000 on December 31, 2019, provided none of the bonds had been retired before that day. 2. On May 1, 2019, $100,000 of the bonds were retired at 112. How...

  • On January 1, 2016, Gates Corporation issued $100,000 of 5-year bonds due December 31, 2020, for...

    On January 1, 2016, Gates Corporation issued $100,000 of 5-year bonds due December 31, 2020, for $103,604.79 minus debt issuance costs of $3,000. The bonds carry a stated rate of interest of 13% payable annually on December 31 and were issued to yield 12%. The company uses the effective interest method of amortization to amortize any discounts or premiums and the straight-line method to amortize the debt issuance costs. Required: Prepare the journal entries to record the issuance of the...

  • On January 1, 2011, Gray Company issued $500,000 of 5-year, 3% bonds for $470,000, their interest...

    On January 1, 2011, Gray Company issued $500,000 of 5-year, 3% bonds for $470,000, their interest payable semiannually every June 30 and December 31. Gray uses straight-line amortization, having judged the difference under the effective-interest method to be immaterial. Scenario #1 On April 30, 2015, Gray retired all of the bonds at 101. Prepare the bond-related journal entry(s) Gray should have made on April 30, 2015. Scenario #2 On April 30th 2015, Gray retired $100,000 of the bonds at 98....

  • On January 31, 2016 Company M issued 10 year, 4% bonds with a face value of...

    On January 31, 2016 Company M issued 10 year, 4% bonds with a face value of $100,000. The bonds were issued at 94 and pay interest on January 31 and July 31. Company M amortizes their bonds by the straight-line method. Record (a) issuance of the bonds on January 31, (b) the semi-annual interest payment and discount amortization on July 31, and the interest accrual and discount amortization on December 31.

  • 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...

  • Paulson Company issues 6%, four-year bonds, on December 31, 2015, with a par value of $200,000...

    Paulson Company issues 6%, four-year bonds, on December 31, 2015, with a par value of $200,000 and semiannual interest payments. Semiannual Period-End Unamortized Discount Carrying Value (0) 12/31/2015 $ 13,466 $ 186,534 (1) 6/30/2016 11,782 188,218 (2) 12/31/2016 10,098 189,902 Use the above straight-line bond amortization table and prepare journal entries for the following. (a) The issuance of bonds on December 31, 2015. (b) The first interest payment on June 30, 2016. (c) The second interest payment on December 31,...

  • Nickel Inc. bought $100,000 of 3-year, 6% bonds as an investment on December 31, 2017 for...

    Nickel Inc. bought $100,000 of 3-year, 6% bonds as an investment on December 31, 2017 for $106,000. The investment receives interest annually and Nickel uses straight-line amortization. On May 1, 2018, the issuer retired $10,000 of the bonds at 110. As a result of the retirement, Nickel will report a: a. $467 gain. b. $467 loss. c. $1,000 gain. d. $5,000 loss.

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