Homework Answers
| cash | interest | Discount | Carrying | ||||
| year | interest | expense | amortized | value | |||
| 1/1/2017 | 172,740 | ||||||
| 6/30/2017 | 6000 | 6910 | 910 | 173,650 | |||
| 12/31/2017 | 6000 | 6946 | 946 | 174,596 | |||
| a) | 6,910 | ||||||
| b) | 174,596 | ||||||
| c) | 13856 | ||||||
| d) | decreased | ||||||
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Question 4 Answer saved Marked out of 4.00 P Flag question Stafford Co. Issued $200,000 face value, 6%, 10-year bonds o...
Stafford Co. Issued $200,000 face value, 6%, 10-year bonds on January 1, 2017 for $172,740. The...
Stafford Co. Issued $200,000 face value, 6%, 10-year bonds on January 1, 2017 for $172,740. The market rate of interest was 8%. Interest is payable semi-annually on June 30 and December 31. Staffer uses the effective interest method to amortize bond premium or discount. (a) Determine the amount of interest expense to be recorded with the first cash interest payment. (b) Determine the carrying value of the bonds on December 31, 2017, after the interest payment has been made. $...
Stafford Co. Issued $200,000 face value, 6%, 10-year bonds on January 1, 2017 for $172,740. The...
Stafford Co. Issued $200,000 face value, 6%, 10-year bonds on January 1, 2017 for $172,740. The market rate of interest was 8%. Interest is payable semi-annually on June 30 and December 31. Staffer uses the effective interest method to amortize bond premium or discount. (a) Determine the amount of interest expense to be recorded with the first cash interest payment. $ 6,910 (b) Determine the carrying value of the bonds on December 31, 2017, after the interest payment has been...
Stafford Co. Issued $200,000 face value, 6%, 10-year bonds on January 1, 2017 for $172,740. The...
Stafford Co. Issued $200,000 face value, 6%, 10-year bonds on January 1, 2017 for $172,740. The market rate of interest was 8%. Interest is payable semi-annually on June 30 and December 31. Staffer uses the effective interest method to amortize bond premium or discount. (a) Determine the amount of interest expense to be recorded with the first cash interest payment. (b) Determine the carrying value of the bonds on December 31, 2017, after the interest payment has been made. (c)...
On January 1, Year 1, Sheffield Co. issued bonds with a face value of $200,000, a...
On January 1, Year 1, Sheffield Co. issued bonds with a face value of $200,000, a term of ten years, and a stated interest rate of 6%. The bonds were issued at 105, and interest is payable each December 31. Sheffield uses the straight-line method to amortize the bond discount. The carrying value of the bonds that would be reported on the December 31, Year 4 balance sheet is: Multiple Choice A. $204,000. B. $200,000. C. $205,000. D. $206,000.
Hopkins Ltd. issued five-year bonds with a face value of $150,000 on January 1. The bonds...
Hopkins Ltd. issued five-year bonds with a face value of $150,000 on January 1. The bonds have a coupon interest rate of 6% and interest is paid semi-annually on June 30 and December 31. The market interest rate was 7% when the bonds were issued at a price of 96 Using above information, determine the proceeds received by the company when the bonds were issued. Proceeds from issue of the bonds LINK TO TEXT Determine the interest expense recorded for...
Hopkins Ltd. issued five-year bonds with a face value of $160,000 on January 1. The bonds...
Hopkins Ltd. issued five-year bonds with a face value of $160,000 on January 1. The bonds have a coupon interest rate of 6% and interest is paid semi-annually on June 30 and December 31. The market interest rate was 7% when the bonds were issued at a price of 97. Your answer is correct Using above information, determine the proceeds received by the company when the bonds were issued. Proceeds from issue of the bonds 155200 LINK TO TEXT Your...
On January 1, Year 1, the Diamond Association issued bonds with a face value of $231,000,...
On January 1, Year 1, the Diamond Association issued bonds with a face value of $231,000, a stated rate of interest of 12 percent, and a 10-year term to maturity. Interest is payable in cash on December 31 of each year. The effective rate of interest was 14 percent at the time the bonds were issued. The bonds sold for $206,902. Diamond used the effective interest rate method to amortize the bond discount. Required a. Determine the amount of the...
Brief Exercise 10-14 Green Hills Ltd. issued five-year bonds with a face value of $140,000 on...
Brief Exercise 10-14 Green Hills Ltd. issued five-year bonds with a face value of $140,000 on January 1. The bonds have a coupon interest rate of 5% and interest is paid semi-annually on June 30 and December 31. The market interest rate was 4% when the bonds were issued at a price of 113 Your answer is correct Using above information, determine the proceeds received by the company when the bonds were issued Proceeds from issue of the bonds 158200...
On January 1, Soren Enterprises issued 15-year bonds with a face value of $200,000. The bonds...
On January 1, Soren Enterprises issued 15-year bonds with a face value of $200,000. The bonds carry a coupon rate of 8 percent, and interest is paid semi-annually. On the issue date, the annual market interest rate for bonds issued by companies with similar riskiness was 10 percent. The issuance price of the bonds was $169,255. Which ONE of the following would be included in the journal entry necessary on the books of the bond issuer to record the SECOND...
Amortization of Discount Stacy Company issued five-year, 10% bonds with a face value of $10,000 on...
Amortization of Discount
Stacy Company issued five-year, 10% bonds with a face value of
$10,000 on January 1, 2017. Interest is paid annually on December
31. The market rate of interest on this date is 12%, and Stacy
Company receives proceeds of $9,279 on the bond issuance.
Required:
Refer to the tables above for present value factors.
1. Prepare a five-year table to amortize the
discount using the effective interest method.
Note: Round the 12/31/18 interest expense and discount amortized...
Stafford Co. Issued $200,000 face value, 6%, 10-year bonds on January 1, 2017 for $172,740. The market rate of interest was 8%. Interest is payable semi-annually on June 30 and December 31. Staffer uses the effective interest method to amortize bond premium or discount. (a) Determine the amount of interest expense to be recorded with the first cash interest payment. (b) Determine the carrying value of the bonds on December 31, 2017, after the interest payment has been made. $...
Stafford Co. Issued $200,000 face value, 6%, 10-year bonds on January 1, 2017 for $172,740. The market rate of interest was 8%. Interest is payable semi-annually on June 30 and December 31. Staffer uses the effective interest method to amortize bond premium or discount. (a) Determine the amount of interest expense to be recorded with the first cash interest payment. $ 6,910 (b) Determine the carrying value of the bonds on December 31, 2017, after the interest payment has been...
Stafford Co. Issued $200,000 face value, 6%, 10-year bonds on January 1, 2017 for $172,740. The market rate of interest was 8%. Interest is payable semi-annually on June 30 and December 31. Staffer uses the effective interest method to amortize bond premium or discount. (a) Determine the amount of interest expense to be recorded with the first cash interest payment. (b) Determine the carrying value of the bonds on December 31, 2017, after the interest payment has been made. (c)...
Hopkins Ltd. issued five-year bonds with a face value of $150,000 on January 1. The bonds have a coupon interest rate of 6% and interest is paid semi-annually on June 30 and December 31. The market interest rate was 7% when the bonds were issued at a price of 96 Using above information, determine the proceeds received by the company when the bonds were issued. Proceeds from issue of the bonds LINK TO TEXT Determine the interest expense recorded for...
Hopkins Ltd. issued five-year bonds with a face value of $160,000 on January 1. The bonds have a coupon interest rate of 6% and interest is paid semi-annually on June 30 and December 31. The market interest rate was 7% when the bonds were issued at a price of 97. Your answer is correct Using above information, determine the proceeds received by the company when the bonds were issued. Proceeds from issue of the bonds 155200 LINK TO TEXT Your...
On January 1, Year 1, the Diamond Association issued bonds with a face value of $231,000, a stated rate of interest of 12 percent, and a 10-year term to maturity. Interest is payable in cash on December 31 of each year. The effective rate of interest was 14 percent at the time the bonds were issued. The bonds sold for $206,902. Diamond used the effective interest rate method to amortize the bond discount. Required a. Determine the amount of the...
Brief Exercise 10-14 Green Hills Ltd. issued five-year bonds with a face value of $140,000 on January 1. The bonds have a coupon interest rate of 5% and interest is paid semi-annually on June 30 and December 31. The market interest rate was 4% when the bonds were issued at a price of 113 Your answer is correct Using above information, determine the proceeds received by the company when the bonds were issued Proceeds from issue of the bonds 158200...
Amortization of Discount
Stacy Company issued five-year, 10% bonds with a face value of
$10,000 on January 1, 2017. Interest is paid annually on December
31. The market rate of interest on this date is 12%, and Stacy
Company receives proceeds of $9,279 on the bond issuance.
Required:
Refer to the tables above for present value factors.
1. Prepare a five-year table to amortize the
discount using the effective interest method.
Note: Round the 12/31/18 interest expense and discount amortized...
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