On January 1, Year 1, Bluestone Company issued bonds with a face value of $500,000 at 90. How will this transaction affect Bluestone Company's cash account?Multiple ChoiceCash will increase by $50,000Cash will increase by $500,000Cash will increase by $470,000Cash will increase by $450,000

Bonds are usually issued by the company as to raise short term finance. These are basically issued…

Answered: On January 1, Year 1, Bluestone Company…

Principles of Accounting Volume 1

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Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 6MC: On July 1, a company sells 8-year $250,000 bonds with a stated interest rate of 6%. If interest...

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Saverin, Inc. produces and sells outdoor equipment. On July 1, 2016, Saverin, Inc. issued 62,500,000 of 10-year, 9% bonds at a market (effective) interest rate of 8%, receiving cash of 66,747,178. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Instructions 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds. 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 2016, and the amortization of the bond premium, using the interest method. (Round to the nearest dollar.) b. The interest payment on June 30, 2017, and the amortization of the bond premium, using the interest method. (Round to the nearest dollar.) 3. Determine the total interest expense for 2016.
Medhurst Corporation issued $90,000 in bonds for $87,000. The bonds had a stated rate of 8% and pay interest quarterly. What is the journal entry to record the first interest payment?
Pace Company issued bonds with a face value of $200,000 at 97. How does the issuance affect the company's accounting equation? Multiple Choice O Assets and liabilities would both increase by $194,000. Assets would increase by $200,000, and liabilities would increase $194,000. Assets would increase by $194,000 and liabilities would increase by $200,000. Assets and liabilities would both increase by $200,000.
On January 1, Year 1, Bluestone Company issued bonds with a face value of $500,000 at 90. How will this transaction affect Bluestone Company's cash account? a. Cash will increase by $ 450,000 b. Cash will increase by $500,000 c. Cash will increase by $470,000 d. Cash will increase by $50,000
Superior Drive-Ins Ltd. borrowed money by issuing $4,500,000 of 6% bonds payable at 96.5 on July 1, 2018. The bonds are 10-year bonds and pay interest each January 1 and July 1. Requirements 1. How much cash did Superior receive when it issued the bonds payable? Journalize this transaction. 2. How much must Superior pay back at maturity? When is the maturity date? 3. How much cash interest will Superior pay each six months? 4. How much interest expense will Superior report each six months? Use the straight-line amortization method. Journalize the entries for the accrual of interest and amortization of discount on December 31, 2018, and the payment of interest on January 1, 2019.
ABC Company issued $100,000 in bonds for $98,000. The bonds had a stated rate of 12% and pay interest quarterly. What is the journal entry to record the first interest payment? O Debit Cash $3000; Credit Interest Expense $3000 O Debit Cash $3267; Credit Interest Expense $3267 O Debit Interest Expense $3267; Credit Cash $3267 O Debit Interest Expense $3000; Credit Cash $3000
A company issues $12 million in term bonds on March 1, Year One, for face value. The bonds pay a stated cash interest rate of 10 percent per year. Interest payments are made every February 28 and August 31. What is the amount of interest payable reported on the December 31, Year One, balance sheet? Responses $600,000 $1,000,000 $400,000 $1,200,000
In your initial examination of National Finance Company, you find the following ledger account balances: 12% Bonds Payable-Due 10 years from January 1, 2020 Debit Credit P 5,000,000 1/2/2020 Cash Receipts Journal Bonds Payable Redeemed Debit Credit 10/01/2022 Cash Disbursement Journal P 1,110,000 Bond Discount Credit Debit P 500,000 1/2/2020 Cash Receipts Journal Bond Interest Expense Credit Debit P 300,000 1/1/2022 Cash Disbursement Journal 7/1/2022 Cash Disbursement Journal 300,000 The bonds were redeemed for permanent cancellation on October 1, 2022 at 108 plus accrued interest. Compute the bond interest expense for the year 2022 Balance Balance Balance Balance
A company issues $12 million in term bonds on March 1, Year One, for face value. The bonds pay a stated cash interest rate of 10 percent per year. Interest payments are made every February 28 and August 31. On financial statements for Year One, what is recognized as interest expense on the income statements? Responses $12,000,000 $300,000 $1,200,000 $1,000,000
The total interest expense over the 5-year life of the bonds is $100,000. How will the issuance of these bonds on January 1, Year 1 be reported on OSU’s Cash Flow Statement? Is it inflow or outflow
On January 1, Year 1, Residence Company issued bonds with a $50,000 face value. The bonds were issued at face value. They had a 20 year term and a stated rate of interest of 7%. Which of the following shows how the payoff of the bond liability will affect Residence’s financial statements on December 31, Year 20 (the maturity date)? Balance Sheet Income Statement Statement of Cash Flows Assets = Liab. + Equity Rev. − Exp. = Net Inc. A. NA = NA + NA NA − NA = NA (50,000) IA B. NA = NA + NA NA − NA = NA (50,000) FA C. 50,000 = 50,000 + NA NA − NA = NA 50,000 IA D. (50,000) = (50,000) + NA NA − NA = NA (50,000) FA
K Savvy Drive-Ins borrowed money by issuing $3,500,000 of 9% bonds payable at 99.5. Interest is paid semiannually. Requirements 1. How much cash did Savvy receive when it issued the bonds payable? 2. How much must Savvy pay back at maturity? 3. How much cash interest will Savvy pay each six months? Requirement 1. How much cash did Savvy receive when it issued the bonds payable? Amount of cash Savvy received when the bonds payable were issued =

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On January 1, Year 1, Bluestone Company issued bonds with a face value of $500,000 at 90. How will this transaction affect Bluestone Company's cash account? Multiple Choice Cash will increase by $50,000 Cash will increase by $500,000 Cash will increase by $470,000 Cash will increase by $450,000