Exercise 6: Complete the following example for a bond issued at a price of 106. T-accts below The...
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,...
1. On January 1, Year 1, Price Co. issued $393,000 of five-year, 6 percent bonds at 95. Interest is payable annually on December 31. The discount is amortized using the straight-line method. Required Prepare the journal entries to record the bond transactions for Year 1 and Year 2. - Record the entry for issuance of bonds -Record the entry for recognizing interest expense on Dec. 31, Year 1 -Record the entry for recognizing interest expense on Dec. 31, Year...
Bond Amortization = Bond Discount or Premium / Number of Interest Periods Interest Paid = Face Amount of Bonds x Stated Interest Rate Interest Expense = Interest Paid + Discount ( or – Premium) Amortization On October 1, 2018 ABC issued 5%, 10-year bonds with a face value of $4,000,000 at 104. Interest is paid on October 1 and April 1, with any premiums or discounts amortized on a straight-line basis. What is interest expense for 2018? Assume ABC Company...
In this assignment you will be working with bonds. You will compute bond issue price, then make an amortization table. You will then do a few select journal entries using your amortization table. Here is the data: Bond issue principal amount: 800,000 Semi-annual interest payments at the end of every six months Term = 6 years Stated rate = 6% Interest payment = ? Scenarios: Market rate = 4% Market rate = 6% Market rate = 8% Requirements: For each...
OBJ. 2, 3 ng equipment, issued ate of 11%, receiving PR 14-2B Bond discount, entries for bonds payable transactions On July 1, Year 1. Livingston Corporation, a wholesaler of manufacturing equipment $46,000,000 of 20-year, 10% bonds at a market (effective) interest rate of 11%. rece cash of $42,309,236. Interest on the bonds is payable semiannually on December 31 June 30. The fiscal year of the company is the calendar year. Instructions 1. Journalize the entry to record the amount of...
In this assignment you will be working with bonds. You will compute bond issue price, then make an amortization table. You will then do a few select journal entries using your amortization table. Here is the data: • Bond issue principal amount: 500,000 • Semi-annual interest payments at the end of every six months • Term = 5 years • Stated rate = 6% • Interest payment = ? Scenarios: 1. Market rate = 4% 2. Market rate = 6%...
Instructions Campbell Inc. produces and sells outdoor equipment. On July 1, 20Y1, Campbell issued $73,900,000 of 10 year, 11% bonds at a market (effective) interest rate of 9%, receiving cash of 883,512,068. Interest on the bonds is payablo semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 2091." 2. Journalize the...
Novak Corp. issued $ 400,000, 6%, 25-year bonds on January 1, 2017, for $ 353,386. This price resulted in an effective-interest rate of 7% on the bonds. Interest is payable annually on January 1. Novak uses the effective-interest method to amortize bond premium or discount. Prepare the schedule using effective-interest method to amortize bond premium or discount of Novak Corp.. (Round answers to 0 decimal places, e.g. 5,250.) Interest Periods Interest to Be Paid Interest Expense to Be Recorded Discount Amortization Unamortized Discount...
Bond Premium, Entries for Bonds Payable Transactions Rodgers Corporation produces and sells football equipment. On July 1, 20Y1, Rodgers issued $48,500,000 of 10-year, 11% bonds at a market (effective) interest rate of 10%, receiving cash of $51,522,110. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the...
Illustration #1 - BOND issued @ PAR Collandra Co. issues $100,000 Bond on Jan 1, 2020, dae in 5 years on Dec 31, 2024 with 7% stated interest rate payable annually a year-end. At the time of issue, the market rate for such boods is also 7% D. Prepare the Joumal entry for the issuance of the band, subsequent payments of interest and motivation of discounts, and final payment of the principal Date Accounts Debe Cerdit Jan 1, 2010 Dec...