(a) Stellar Co. sold $1,950,000 of 12%, 10-year bonds at 106 on January 1, 2020. The bonds were dated January 1, 2020, and payinterest on July 1 and January 1. If Stellar uses the straight-line method to amortize bond premium or discount, determine the amountof interest expense to be reported on July 1, 2020, and December 31, 2020. (Round answer to O decimal places, e.g. 38,548.)Interest expense to be recorded$Interest expense to be recordedLA(b) Pearl Inc. issued $570,000 of 9%, 10-year bonds on June 30, 2020, for $471,929. This price provided a yield of 12% on the bonds.Interest is payable semiannually on December 31 and June 30. If Pearl uses the effective-interest method, determine the amount ofinterest expense to record if financial statements are issued on October 31, 2020. (Round intermediate calculations to 6 decimal places,e.g. 1.251247 and final answer to O decimal places, e.g. 38,548.)$111150LA

When bonds are issued at a price more than face value, then it means they are issued at a premium.…

Stellar Co. sold $1,950,000 of 12%, 10-year bonds at 106 on January 1, 2020. The bonds were dated January 1, 2020, and pay terest on July 1 and January 1. If Stellar uses the straight-line method to amortize bond premium or discount, determine the amount interest expense to be reported on July 1, 2020, and December 31, 2020. (Round answer to O decimal places, e.g. 38,548.) Interest expense to be recorded $ LA 111150

Stellar Co. sold $1,950,000 of 12%, 10-year bonds at 106 on January 1, 2020. The bonds were dated January 1, 2020, and pay terest on July 1 and January 1. If Stellar uses the straight-line method to amortize bond premium or discount, determine the amount interest expense to be reported on July 1, 2020, and December 31, 2020. (Round answer to O decimal places, e.g. 38,548.) Interest expense to be recorded $ LA 111150

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 7P: Wilbury Corporation issued 1 million of 13.5% bonds for 985,071.68. The bonds are dated and issued...

See similar textbooks

Similar questions

On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?
Wilbury Corporation issued 1 million of 13.5% bonds for 985,071.68. The bonds are dated and issued October 1, 2019, are due September 30, 2020, and pay interest semiannually on March 31 and September 30. Assume an effective yield rate of 14%. Required: 1. Prepare a bond interest expense and discount amortization schedule using the straight-line method. 2. Prepare a bond interest expense and discount amortization schedule using the effective interest method. 3. Prepare adjusting entries for the end of the fiscal year December 31, 2019, using the: a. straight-line method of amortization b. effective interest method of amortization 4. If income before interest and income taxes of 30% in 2020 is 500,000, compute net income under each alternative. 5. Assume the company retired the bonds on June 30, 2020, at 98 plus accrued interest. Prepare the journal entries to record the bond retirement using the: a. straight line method of amortization b. effective interest method of amortization 6. Compute the companys times interest earned (pretax operating income divided by interest expense) for 2020 under each alternative.
(a) Pharoah Co. sold $2,080,000 of 12%, 10-year bonds at 102 on January 1, 2020. The bonds were dated January 1, 2020, and pay interest on July 1 and January 1. If Pharoah uses the straight-line method to amortize bond premium or discount, determine the amount of interest expense to be reported on July 1, 2020, and December 31, 2020. (Round answer to 0 decimal places, e.g. 38,548.) Interest expense to be recorded $ (b) Novak Inc. issued $650,000 of 9%, 10-year bonds on June 30, 2020, for $538,165. This price provided a yield of 12% on the bonds. Interest is payable semiannually on December 31 and June 30. If Novak uses the effective-interest method, determine the amount of interest expense to record if financial statements are issued on October 31, 2020. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.) Interest expense to be recorded $
(a) Novak Co. sold $2,080,000 of 12%, 10-year bonds at 105 on January 1, 2020. The bonds were dated January 1, 2020, and pay interest on July 1 and January 1. If Novak uses the straight-line method to amortize bond premium or discount, determine the amount of interest expense to be reported on July 1, 2020, and December 31, 2020. (Round answer to 0 decimal places, e.g. 38,548.) Interest expense to be recorded $ ?
Presented below are two independent situations.(a) Waterway Co. sold $1,950,000 of 12%, 10-year bonds at 106 on January 1, 2020. The bonds were dated January 1, 2020, and pay interest on July 1 and January 1. If Waterway uses the straight-line method to amortize bond premium or discount, determine the amount of interest expense to be reported on July 1, 2020, and December 31, 2020. (Round answer to 0 decimal places, e.g. 38,548.) Interest expense to be recorded $ (b) Wildhorse Inc. issued $570,000 of 9%, 10-year bonds on June 30, 2020, for $471,929. This price provided a yield of 12% on the bonds. Interest is payable semiannually on December 31 and June 30. If Wildhorse uses the effective-interest method, determine the amount of interest expense to record if financial statements are issued on October 31, 2020. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.) Interest expense to be recorded $
a. Jason Allen Co. sold $2,080,000 of 12%, 10-year bonds at 102 on January 1, 2025. The bonds were dated January 1, 2025, and pay interest on July 1 and January 1. If Allen uses the straight-line method to amortize bond premium or discount, determine the amount of interest expense to be reported on July 1, 2025, and December 31, 2025. (Round answer to O decimal places, e.g. 38,548.) Interest expense to be recorded $ b. Matthew Young Inc. issued $650,000 of 9%, 10-year bonds on June 30, 2025, for $538,165. This price provided a yield of 12% on the bonds. Interest is payable semiannually on December 31 and June 30. If Young uses the effective-interest method, determine the amount of interest expense to record if financial statements are issued on October 31, 2025. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to O decimal places, e.g. 38,548.) Interest expense to be recorded $
Presented below are two independent situations.(a) Bramble Co. sold $1,930,000 of 12%, 10-year bonds at 106 on January 1, 2020. The bonds were dated January 1, 2020, and pay interest on July 1 and January 1. If Bramble uses the straight-line method to amortize bond premium or discount, determine the amount of interest expense to be reported on July 1, 2020, and December 31, 2020. (Round answer to 0 decimal places, e.g. 38,548.) Interest expense to be recorded $ (b) Sunland Inc. issued $610,000 of 9%, 10-year bonds on June 30, 2020, for $505,047. This price provided a yield of 12% on the bonds. Interest is payable semiannually on December 31 and June 30. If Sunland uses the effective-interest method, determine the amount of interest expense to record if financial statements are issued on October 31, 2020. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.) Interest expense to be recorded $
On July 01, 2019, SALUDO RAW SA'YO SI MAGELLAN SABI NI LOLA CO. received P1,032,880 for P1,000,000 face amount, 12% bonds, a price that yields 10%. Using the interest method of amortization, how much is the interest expense for the six months ended December 31, 2019? Use the same information in MC 18. What is the bond carrying value at December 31, 2019? a. P1,024,524 b. P1,031,236 c. P1,032,880 d. P1,041,236
a. Matthew Young Co. sold $1,890,000 of 12%, 10-year bonds at 105 on January 1, 2025. The bonds were dated January 1, 2025, and pay interest on July 1 and January 1. If Young uses the straight-line method to amortize bond premium or discount, determine the amount of interest expense to be reported on July 1, 2025, and December 31, 2025. (Round answer to O decimal places, e.g. 38,548.) Interest expense to be recorded $ 89775 b. Gary King Inc. issued $570,000 of 9%, 10-year bonds on June 30, 2025, for $471,929. This price provided a yield of 12% on the bonds. Interest is payable semiannually on December 31 and June 30. If King uses the effective-interest method, determine the amount of interest expense to record if financial statements are issued on October 31, 2025. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to O decimal places, e.g. 38,548.) Interest expense to be recorded $ 18877
Presented below are two independent situations. (a) Pharoah Co. sold $1,890,000 of 12%, 10-year bonds at 105 on January 1, 2020. The bonds were dated January 1, 2020, and pay interest on July 1 and January 1. If Pharoah uses the straight-line method to amortize bond premium or discount, determine the amount of interest expense to be reported on July 1, 2020, and December 31, 2020. (Round answer to O decimal places, e.g. 38,548.) Interest expense to be recorded $ (b) Novak Inc. issued $570,000 of 9%, 10-year bonds on June 30, 2020, for $471,929. This price provided a yield of 12% on the bonds. Interest is payable semiannually on December 31 and June 30. If Novak uses the effective-interest method, determine the amount of interest expense to record if financial statements are issued on October 31, 2020. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to O decimal places, e.g. 38,548.) Interest expense to be recorded $
Presented below are two independent situations. (a) Novak Co. sold $2,080,000 of 12%, 10-year bonds at 105 on January 1, 2020. The bonds were dated January 1, 2020, and pay interest on July 1 and January 1. If Novak uses the straight-line method to amortize bond premium or discount, determine the amount of interest expense to be reported on July 1, 2020, and December 31, 2020. (Round answer to 0 decimal places, e.g. 38,548.) Interest expense to be recorded $ (b) Splish Inc. issued $590,000 of 9%, 10-year bonds on June 30, 2020, for $488,488. This price provided a yield of 12% on the bonds. Interest is payable semiannually on December 31 and June 30. If Splish uses the effective-interest method, determine the amount of interest expense to record if financial statements are issued on October 31, 2020. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.) Interest expense to be recorded
(c) Assume that on July 1, 2027, Swifty Co. redeems half of the bonds at a cost of $1,126,600 plus accrued interest. Prepare the journal entry to record this redemption. (Round present value factor to 5 decimal places, e.g. 1.24356 and final answers to O decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date July 1, 2027 July 1, 2027 Account Titles and Explanation (To record interest) (To record reacquisition) Debit Credit 11 TILL