1.When should interest expense on a bond be recorded? 2.Who authorizes the issuance of bonds?
1.When should interest expense on a bond be recorded?
2.Who authorizes the issuance of bonds?
Homework Answers
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1.When should interest expense on a bond be recorded?
2.Who authorizes the issuance of bonds?
When bonds are issued at a discount and interest expense is recorded at the effective interest...
When bonds are issued at a discount and interest expense is recorded at the effective interest rate, interest expense in the earlier years of the term to maturity will be Less than the cash interest payments made. Less than if the straight-line method were used. Greater that if the straight-line method were used. The same as if the straight-line method were used.
AP10-5 Recording Bond Issuance, Interest Expense, and Effects of Bond Redemption of Financial Statements (Effective-Interest Method)...
AP10-5 Recording Bond Issuance, Interest Expense, and Effects of Bond Redemption of Financial Statements (Effective-Interest Method) (P10-7) Ashraf Ltd. sold on June 30, 2017, $4,000,000, 20-year bonds, paying a nominal interest rate of 6.5 percent. The bonds were issued at 105.7344 percent with a yield of 6 percent. The bonds pay annual interest on June 30. The company uses the effective interest method and its fiscal year ends on December 31. Required: 1. Prepare the journal entry to record the...
Exercise 10-2 Recording bond issuance at par, interest payments, and bond maturity LO P1 Brussels Enterprises...
Exercise 10-2 Recording bond issuance at par, interest payments, and bond maturity LO P1 Brussels Enterprises issues bonds at par dated January 1, 2019, that have a $3,000,000 par value, mature in four years, and pay 8% interest semiannually on June 30 and December 31. 1. Record the entry for the issuance of bonds for cash on January 1. 2. Record the entry for the first semiannual interest payment and the second semiannual interest payment. 3. Record the entry for...
QS 10-4 Journalizing bond issuance LO P1 Prepare the journal entry for the issuance of these...
QS 10-4 Journalizing bond issuance LO P1 Prepare the journal entry for the issuance of these bonds. Assume the bonds are issued for cash on January 1, 2017 Garcia Company issues 11.00%, 15-year bonds with a par value of $440,000 and semiannual interest payments. On the issue date, annual market rate for these bonds is 9.00%, which implies a selling price of 114. View transaction list Journal entry worksheet Record the issue of bonds with a par value of $440,000....
E15-2 Prepare entries for issuance of bonds, and payment and accrual of bond interest. E15-2 Оп...
E15-2
Prepare entries for issuance of bonds, and payment and accrual of bond interest. E15-2 Оп January 1, 2017, Klosterman Company issued $500,000, 10%, 10-year bon sat face value. Interest is payable annually on January 1. Instructions Prepare journal entries to record the following. (a) The issuance of the bonds (b) (LO 2) The accrual of interest on December 31, 2017. (c) The payment of interest on January 1, 2018
When Bonds are issued at a discount, the semiannual Bond Interest Expense is a. the semiannual...
When Bonds are issued at a discount, the semiannual Bond Interest Expense is a. the semiannual bond interest payment + the semiannual amortization of the bond discount b. the semiannual bond interest payment - the semiannual amortization of the bond discount c. the semiannual bond interest payment + interest on the bond discount d. the semiannual bond interest payment - interest on the bond discount
Open image in new tab to enlargen it. bonds and bond interest expense for 2015, assuming...
Open image in new tab to enlargen it.
bonds and bond interest expense for 2015, assuming that the bonds are sold at 102. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) no interest is Saberhagen Company sold $2,580,000, 8%, 10-year bonds on July 1, 2015. The bonds were dated July 1, 2015, and pay interest July 1 and January 1. Saberhagen Company uses the straight-line method to amortize bond premium or discount. Assume no...
Journalize the bond issuance Issuing Bonds at a Premium On the first day of the fiscal...
Journalize the bond issuance
Issuing Bonds at a Premium On the first day of the fiscal year, a company issues a $5,000,000, 7%, five-year bond that pays semiannual interest of $175,000 ($5,000,000 x 7% X 1/2), receiving cash of $5,400,000. Journalize the bond issuance. If an amount box does not require an entry, leave it blank. 135,000 Interest Expense X Premium on Bonds Payable Cash X 40,000 X 175,000
Please complete all parts. Thank you Journalize issuance of the bond and the first semiannual interest...
Please complete all parts. Thank you
Journalize issuance of the bond and the first semiannual interest payment under each of the three assumptions. The company amortizes bond premium and discount by the effective-interest amortization method. Explanations are not required. (Record debits first, then credits. Exclude explanations from any journal entries. Round your final answers to the nearest whole dollar.) Assumption 1. Seven-year bonds payable with face value of $85,000 and stated interest rate of 10%, paid semiannually. The market rate...
QS 10-18B Effective Interest: Bond premium computations LO PO Garcia Company issues 10%, 15-year bonds with...
QS 10-18B Effective Interest: Bond premium computations LO PO Garcia Company issues 10%, 15-year bonds with a par value of $260,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 8%, which implies a selling price of 117 14. The effective interest method is used to allocate interest expense. 1. Using the implied selling price of 117 14, what are the issuer's cash proceeds from issuance of these bonds? 2. What total amount...
AP10-5 Recording Bond Issuance, Interest Expense, and Effects of Bond Redemption of Financial Statements (Effective-Interest Method) (P10-7) Ashraf Ltd. sold on June 30, 2017, $4,000,000, 20-year bonds, paying a nominal interest rate of 6.5 percent. The bonds were issued at 105.7344 percent with a yield of 6 percent. The bonds pay annual interest on June 30. The company uses the effective interest method and its fiscal year ends on December 31. Required: 1. Prepare the journal entry to record the...
Exercise 10-2 Recording bond issuance at par, interest payments, and bond maturity LO P1 Brussels Enterprises issues bonds at par dated January 1, 2019, that have a $3,000,000 par value, mature in four years, and pay 8% interest semiannually on June 30 and December 31. 1. Record the entry for the issuance of bonds for cash on January 1. 2. Record the entry for the first semiannual interest payment and the second semiannual interest payment. 3. Record the entry for...
QS 10-4 Journalizing bond issuance LO P1 Prepare the journal entry for the issuance of these bonds. Assume the bonds are issued for cash on January 1, 2017 Garcia Company issues 11.00%, 15-year bonds with a par value of $440,000 and semiannual interest payments. On the issue date, annual market rate for these bonds is 9.00%, which implies a selling price of 114. View transaction list Journal entry worksheet Record the issue of bonds with a par value of $440,000....
E15-2
Prepare entries for issuance of bonds, and payment and accrual of bond interest. E15-2 Оп January 1, 2017, Klosterman Company issued $500,000, 10%, 10-year bon sat face value. Interest is payable annually on January 1. Instructions Prepare journal entries to record the following. (a) The issuance of the bonds (b) (LO 2) The accrual of interest on December 31, 2017. (c) The payment of interest on January 1, 2018
Open image in new tab to enlargen it.
bonds and bond interest expense for 2015, assuming that the bonds are sold at 102. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) no interest is Saberhagen Company sold $2,580,000, 8%, 10-year bonds on July 1, 2015. The bonds were dated July 1, 2015, and pay interest July 1 and January 1. Saberhagen Company uses the straight-line method to amortize bond premium or discount. Assume no...
Journalize the bond issuance
Issuing Bonds at a Premium On the first day of the fiscal year, a company issues a $5,000,000, 7%, five-year bond that pays semiannual interest of $175,000 ($5,000,000 x 7% X 1/2), receiving cash of $5,400,000. Journalize the bond issuance. If an amount box does not require an entry, leave it blank. 135,000 Interest Expense X Premium on Bonds Payable Cash X 40,000 X 175,000
Please complete all parts. Thank you
Journalize issuance of the bond and the first semiannual interest payment under each of the three assumptions. The company amortizes bond premium and discount by the effective-interest amortization method. Explanations are not required. (Record debits first, then credits. Exclude explanations from any journal entries. Round your final answers to the nearest whole dollar.) Assumption 1. Seven-year bonds payable with face value of $85,000 and stated interest rate of 10%, paid semiannually. The market rate...
QS 10-18B Effective Interest: Bond premium computations LO PO Garcia Company issues 10%, 15-year bonds with a par value of $260,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 8%, which implies a selling price of 117 14. The effective interest method is used to allocate interest expense. 1. Using the implied selling price of 117 14, what are the issuer's cash proceeds from issuance of these bonds? 2. What total amount...
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