ACG 2021 – CHAP 9 & 10 EXERCISE
Journal- Principles -Ch 9 & 10.pdf
A company has a \(\$ 500,000\) callable bond with a \(\$ 7,000\) premium on the books. These balances are reflected in the t-accts below. The bond is retired at a price of 102. Review these steps to record the retirement entry.
1) Determine how much cash must be paid and record in the T-acct. \(\$ 500,000 \times 1.02=\$ 510,000\)
2) Record entry to zero out the Bonds Payable account.
3) Record entry to zero out the Premium account.
4) Add up your debits and credits to this point. If you need a debit to balance out the entry, record it to a "Loss on Retirement of Bonds" account. If you need a credit to balance out the entry, record it to a "Gain on Retirement of Bonds account. In this example, a loss is recorded.
Homework Answers
The answer has been presented in the supporting sheets. All the parts has been solved with detailed explanation and format. For detailed answers refer to the supporting sheets.
Payable: Use the t-accts below to record the following entries. If you get stuck, carefully revie...
Payable: Use the t-accts below to record the following entries. If you get stuck, carefully review the online and text examples. On September 1t, Geo Inc. borrows $2,400 from State Bank and signs a 10 month short-term note payable. The interest rate on the note is 7%. Even though the note is only for 10 months, the interest rate is an annual rate (see interest calculations below). a) Record the entry to borrow the money from the bank. b) Next,...
WILL RATE FAST: E14.12B (LO 1,2) (Entry for Retirement of Bond; Bond Issue Costs) On January...
WILL RATE FAST:
E14.12B (LO 1,2) (Entry for Retirement of Bond; Bond Issue Costs) On January 1, 2015, Ladon Corporation issued $5,000,000 of 10% bonds at 102 due December 31, 2024. The premium on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable "interest method".) The bonds are callable at 105 (i.e., at 105% of face amount), and on January 2, 2020, London called one-half...
Question 7 Assume the following account balances immediately after an interest payments date: Bonds Payable $200,000...
Question 7 Assume the following account balances immediately after an interest payments date: Bonds Payable $200,000 Premium on Bonds Payable 10,00 If the bonds are retired immediately at a total cost of $205,000,000 the journal entry to record this event is: Cash 205,000 Loss on Bond Retirement 5,000 Premium on Bonds Payable Bonds Payable 10,000 200,000 Bonds Payable 200,000 Premium on Bonds Payable 10,000 Cash Gain on Bond Retirement 205,000 5,000 Bonds Payable 200,000 Loss on Bond Retirement 10,000 Premium...
Question 6 Not yet answered Marked out of 1.00 P Flag question On April 30, 2021,...
Question 6 Not yet answered Marked out of 1.00 P Flag question On April 30, 2021, one year before maturity, Pearson Corporation retired $500,000 of 6% bonds payable at 102. The book value of the bonds on April 30 was $492,500. Bond interest was last paid on April 30, 2021. What is the gain or loss on the retirement of the bonds? Select one: A. $7,500 gain B. $17,500 loss C. $17.500 D. $7,500 gain
Philosophy Insights Corporation retires its $500,000 face-value bonds at 102 on January 1, after interest is...
Philosophy Insights Corporation retires its $500,000 face-value bonds at 102 on January 1, after interest is paid. The bonds’ carrying value at the date of retirement is $481,250. What should the entry to record the redemption include? $10,000 debit to premium on bonds payable $18,750 credit to discount on bonds payable $18,750 credit to loss on bond redemption $28,750 debit to gain on bond redemption
Can you please breakdown how to calculate the missing figure? Exercise 175 your answer is partially...
Can you please breakdown how to calculate the missing figure?
Exercise 175 your answer is partially correct. Try again. Stengle Company retired $500,000 face value, 9% bonds on June 30, 2020 at 96. The carrying value of the bonds at the redemption date was $508,000. Prepare the journal entry to record the redemption of the bonds. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Bonds Payable Premium...
Exercise 14-18 on June 30, 2010, culver Limited issued 11.75% bonds with a par value of...
Exercise 14-18 on June 30, 2010, culver Limited issued 11.75% bonds with a par value of $773,000 due in 20 years. They were issued at 96 and were callable at 105 at ayda te after une 30 2017 Because of lower interest rates and a significant change in the company's credit rating, it was decided to call the entire issue on June 30, 2017 and to issue new bonds. New 8% bonds were sold in the amount of $1 million...
On January 1, 2021, Splash City Issues $500,000 of 9% bonds, due in 20 years, with...
On January 1, 2021, Splash City Issues $500,000 of 9% bonds, due in 20 years, with Interest payable semiannually on June 30 and December 31 each year. 1.66 points Required: Assuming the market Interest rate on the issue date is 9%, the bonds will issue at $500,000. Record the bond issue on January 1, 2021, and the first two semiannual Interest payments on June 30, 2021, and December 31, 2021. (If no entry is required for a particular transaction/event, select...
At 31 December 20X8, Northern Resources Ltd. reports the following on its statement of financial position:...
At 31 December 20X8, Northern Resources Ltd. reports the following on its statement of financial position: Bonds payable, 4%, interest payable semi-annually on 30 June and 30 December $ 9,400,000 Discount on bonds payable 470,000 $ 8,930,000 The effective interest rate, or market interest rate, was 6% on issuance. On 1 March 20X9, 30% of the bond issue was bought back in the open market and retired at 101 plus accrued interest. The following table relates to 20X9 (numbers have...
Exercise 14-12 On January 2, 2015, Swifty Corporation issued $2,100,000 of 10% bonds at 97 due...
Exercise 14-12 On January 2, 2015, Swifty Corporation issued $2,100,000 of 10% bonds at 97 due December 31, 2024. Interest on the bonds is payable annually each December 31. The discount on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable "interest method.") The bonds are callable at 102 (i.e., at 102% of face amount), and on January 2, 2020, Swifty called $1,260,000 face amount...
Payable: Use the t-accts below to record the following entries. If you get stuck, carefully review the online and text examples. On September 1t, Geo Inc. borrows $2,400 from State Bank and signs a 10 month short-term note payable. The interest rate on the note is 7%. Even though the note is only for 10 months, the interest rate is an annual rate (see interest calculations below). a) Record the entry to borrow the money from the bank. b) Next,...
WILL RATE FAST:
E14.12B (LO 1,2) (Entry for Retirement of Bond; Bond Issue Costs) On January 1, 2015, Ladon Corporation issued $5,000,000 of 10% bonds at 102 due December 31, 2024. The premium on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable "interest method".) The bonds are callable at 105 (i.e., at 105% of face amount), and on January 2, 2020, London called one-half...
Question 7 Assume the following account balances immediately after an interest payments date: Bonds Payable $200,000 Premium on Bonds Payable 10,00 If the bonds are retired immediately at a total cost of $205,000,000 the journal entry to record this event is: Cash 205,000 Loss on Bond Retirement 5,000 Premium on Bonds Payable Bonds Payable 10,000 200,000 Bonds Payable 200,000 Premium on Bonds Payable 10,000 Cash Gain on Bond Retirement 205,000 5,000 Bonds Payable 200,000 Loss on Bond Retirement 10,000 Premium...
Question 6 Not yet answered Marked out of 1.00 P Flag question On April 30, 2021, one year before maturity, Pearson Corporation retired $500,000 of 6% bonds payable at 102. The book value of the bonds on April 30 was $492,500. Bond interest was last paid on April 30, 2021. What is the gain or loss on the retirement of the bonds? Select one: A. $7,500 gain B. $17,500 loss C. $17.500 D. $7,500 gain
Can you please breakdown how to calculate the missing figure?
Exercise 175 your answer is partially correct. Try again. Stengle Company retired $500,000 face value, 9% bonds on June 30, 2020 at 96. The carrying value of the bonds at the redemption date was $508,000. Prepare the journal entry to record the redemption of the bonds. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Bonds Payable Premium...
Exercise 14-18 on June 30, 2010, culver Limited issued 11.75% bonds with a par value of $773,000 due in 20 years. They were issued at 96 and were callable at 105 at ayda te after une 30 2017 Because of lower interest rates and a significant change in the company's credit rating, it was decided to call the entire issue on June 30, 2017 and to issue new bonds. New 8% bonds were sold in the amount of $1 million...
On January 1, 2021, Splash City Issues $500,000 of 9% bonds, due in 20 years, with Interest payable semiannually on June 30 and December 31 each year. 1.66 points Required: Assuming the market Interest rate on the issue date is 9%, the bonds will issue at $500,000. Record the bond issue on January 1, 2021, and the first two semiannual Interest payments on June 30, 2021, and December 31, 2021. (If no entry is required for a particular transaction/event, select...
Exercise 14-12 On January 2, 2015, Swifty Corporation issued $2,100,000 of 10% bonds at 97 due December 31, 2024. Interest on the bonds is payable annually each December 31. The discount on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable "interest method.") The bonds are callable at 102 (i.e., at 102% of face amount), and on January 2, 2020, Swifty called $1,260,000 face amount...
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