ZuoTi.Pro
Question

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 $103,604.78 minus bond issue 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.

Required:

Prepare the journal entries to record the issuance of the bonds, all the interest payments, premium amortizations, bond issue cost amortizations, and the repayment of the bonds. In addition, prepare a bond interest expense and premium amortization schedule for the bonds.
business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

0 0
Add a comment
Know the answer?
Add Answer to:
On January 1, 2016, Gates Corporation issued $100,000 of 5-year bonds due December 31, 2020, for...
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

  • 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...

  • WS Inc. issued $100,000 of 10% bonds on January 1, 2016. The bonds are due December...

    WS Inc. issued $100,000 of 10% bonds on January 1, 2016. The bonds are due December 31, 2017 (2 years) and were issued to yield 10% (market interest rate is 12%). Interest will be paid annually. Calculate the price of the bonds. Using the effective interest rate of amortization, prepare an amortization chart for WS Inc. showing both 2016 and 2017 calculations. Show all applicable journal entries: Issuance of bonds 2016 and 2017 interest payments Retirement of bonds

  • question 14-4 P10 LO 14.3 face value b Umption of Effective Interest Rate On June 30,...

    question 14-4 P10 LO 14.3 face value b Umption of Effective Interest Rate On June 30, 2017 face value bonds for S761,150.96. On December 31, 2019, Gaston $734,645.28. The bonds were dated January 1, 2019, pay 30, and are due December 31, 2026. E UF the bonds and debt issuance costs Kate On June 30, 2019, Gaston Corporation sold $800,000 of 11% er 31, 2019, Gaston sold $700,000 of this same bond issue for nuary 1, 2019, pay interest semiannually...

  • On January 1, 2016, Knorr Corporation issued $1,400,000 of 6%, 5-year bonds dated January 1, 2016

     On January 1, 2016, Knorr Corporation issued $1,400,000 of 6%, 5-year bonds dated January 1, 2016. The bonds pay interest annually on December 31. The bonds were issued to yield 7%. Bond issue costs associated with the bonds totaled 522,107.40. Required: Prepare the journal entries to record the following: January 1, 2016 Sold the bonds at an effective rate of 7% December 31, 2016 First interest payment using the effective interest method December 31, 2016 Amortization of bond issue costs using the straight-line method December 31,...

  • 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,...

  • Chowan Corporation issued $136,000 of 7% bonds dated January 1, 2016, for $131,421.73 on January 1,...

    Chowan Corporation issued $136,000 of 7% bonds dated January 1, 2016, for $131,421.73 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. 1. 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...

  • On January 1, 2016, Knorr Corporation issued $1,400,000 of 7%, 5-year bonds dated January 1, 2016....

    On January 1, 2016, Knorr Corporation issued $1,400,000 of 7%, 5-year bonds dated January 1, 2016. The bonds pay interest annually on December 31. The bonds were issued to yield 8%. Bond issue costs associated with the bonds totaled $21,540.76. Required: Prepare the journal entries to record the following: January 1, 2016 Sold the bonds at an effective rate of 8% December 31, 2016 First interest payment using the effective interest method December 31, 2016 Amortization of bond issue costs...

  • 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...

  • Polk Incorporated issued $213,000 of 9% bonds on July 1, 2016, for $220,918.63. The bonds were...

    Polk Incorporated issued $213,000 of 9% bonds on July 1, 2016, for $220,918.63. The bonds were dated January 1, 2016, pay interest on each June 30 and December 31, are due December 31, 2020, and were issued to yield 8%. Polk uses the effective interest method of amortization. Required: Prepare a bond interest expense and premium amortization schedule for the bonds through June 30, 2017. Prepare a bond interest expense and discount amortization schedule for the bonds through June 30,...

  • On January 1, 2020, Fields Corporation issued ten-year bonds with a par value of $2,000,000. The...

    On January 1, 2020, Fields Corporation issued ten-year bonds with a par value of $2,000,000. The bonds pay interest semiannually on June 30 and December 31 at an annual rate of 10%. The bonds were issued to yield 8% annually. Fields Corporation has a fiscal year that ends August 31 each year. Fields Corporation uses the effective-interest method to calculate its interest expense each period. Required: 1. Compute the issue price of the bonds and the journal entry at issuance....

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