The Scotia Company issues $100,000, 10% bonds at 102 on April 1, 2020. The bonds are...
The Scotia Company issues $100,000, 10% bonds at 102 on April 1, 2020. The bonds are dated January 1, 2020 and mature ten years from that date. Straight-line amortization is used. Interest is paid annually each December 31. Compute the bond carrying value as of December 31, 2027.
Homework Answers
Carrying value of bonds at December 31 2027=$100,400
Working
| Changes During the Period | Ending Bond Liability Balance | ||||||
| Period Ended | Cash Paid | Premium Amortized | Interest expense | Bonds payable | Premium on Bonds payable | Carrying Value | |
| Start | $ 100,000 | $ (2,000) | $ 102,000 | ||||
| 31-Dec | 2020 | $ 10,000 | $ (200) | $ 9,800 | $ 100,000 | $ (1,800) | $ 101,800 |
| 31-Dec | 2021 | $ 10,000 | $ (200) | $ 9,800 | $ 100,000 | $ (1,600) | $ 101,600 |
| 31-Dec | 2022 | $ 10,000 | $ (200) | $ 9,800 | $ 100,000 | $ (1,400) | $ 101,400 |
| 31-Dec | 2023 | $ 10,000 | $ (200) | $ 9,800 | $ 100,000 | $ (1,200) | $ 101,200 |
| 31-Dec | 2024 | $ 10,000 | $ (200) | $ 9,800 | $ 100,000 | $ (1,000) | $ 101,000 |
| 31-Dec | 2025 | $ 10,000 | $ (200) | $ 9,800 | $ 100,000 | $ (800) | $ 100,800 |
| 31-Dec | 2026 | $ 10,000 | $ (200) | $ 9,800 | $ 100,000 | $ (600) | $ 100,600 |
| 31-Dec | 2027 | $ 10,000 | $ (200) | $ 9,800 | $ 100,000 | $ (400) | $ 100,400 |
| 31-Dec | 2028 | $ 10,000 | $ (200) | $ 9,800 | $ 100,000 | $ (200) | $ 100,200 |
| 31-Dec | 2029 | $ 10,000 | $ (200) | $ 9,800 | $ 100,000 | $ - | $ 100,000 |
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The Scotia Company issues $100,000, 10% bonds at 102 on April 1,
2020. The bonds are...
The Scotia Company issues $100,000, 10% bonds at 102 on April 1, 2020. The bonds are...
The Scotia Company issues $100,000, 10% bonds at 102 on April 1, 2020. The bonds are dated January 1, 2020 and mature ten years from that date. Straight-line amortization is used. Interest is paid annually each December 31. Compute the bond carrying value as of December 31, 2027.
The Scotia Company issues $100,000, 10% bonds at 102 on April 1, 2020. The bonds are...
The Scotia Company issues $100,000, 10% bonds at 102 on April 1, 2020. The bonds are dated January 1, 2020 and mature ten years from that date. Straight-line amortization is used. Interest is paid annually each December 31. Compute the bond carrying value as of December 31, 2027. I keep receiving the wrong computation for this question! Can somebody please include the 3 months because this bond is issued on April 1st. Please please show the correct computation, thank you.
3. The Scotia Company issues $100,000, 10% bonds at 102 on April 1, 2020. The bonds...
3. The Scotia Company issues $100,000, 10% bonds at 102 on April 1, 2020. The bonds are dated January 1, 2020 and mature ten years from that date. Straight-line amortization is used. Interest is paid annually each December 31. Compute the bond carrying value as of December 31, 2027. Answer $_______________ 4. At December 31, 2020, the following balances existed for AAA Corporation: Bonds Payable (4%) $500,000 Discount on Bonds Payable 10,000 The bonds mature on 12/31/27. Straight-line amortization is...
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