The Smart Company sold $500,000 of 8 percent, 20-year bonds on April 1, 2011, at 105. The semiannual interest payment dates are March 31 and September 30. The market interest rate is 7.5 percent. The company's fiscal year ends September 30. Use the effective interest method to calculate the amortization. With regard to the bond interest payment on September 30, 2011: How much is interest expense?
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- Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market rate of 4%. The bonds paid interest semi-annually on June 30 and Dec. 31. How much money did the company receive when the bonds were issued? The bonds would be quoted at what rate?On July 1, Somerset Inc. issued $200,000 of 10%, 10-year bonds when the market rate was 12%. The bonds paid interest semi-annually. Assuming the bonds sold at 58.55, what was the selling price of the bonds? Explain why the cash received from selling this bond is different from the $200,000 face value of the bond.The Smart Company sold Rs. 500,000 of 8 percent, 20-year bonds on April 1, 2011, at 105. The semiannual interest payment dates are March 31 and September 30. The market interest rate is 7.5 percent. The company's fiscal year ends September 30. Use the effective interest method to calculate the amortization. With regard to the bond issue on April 1, 2011: How much cash is received? How much is Bonds Payable? What is the difference between a and b called and how much is it? With regard to the bond interest payment on September 30, 2011: How much cash is paid in interest? How much is the amortization? How much is interest expense? With regard to the bond interest payment on March 31, 2012: How much cash is paid in interest? How much is the amortization? How much is interest expense?
- Temptation Vacations issues $60 million in bonds on January 1, 2021, that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below:Required:1. Were the bonds issued at face amount, a discount, or a premium?2. What is the original issue price of the bonds?3. What is the face amount of the bonds?4. What is the stated annual interest rate?5. What is the market annual interest rate?6. What is the total cash paid for interest assuming the bonds mature in 20 years?Terry Company is authorized to issue P5,000,000 of 6%, 10-year bonds dated July 1, 2011 with interest payments on June 30 and December 31. When bonds are issued on November 1, 2011, Terry Company received cash of P5,150,000 ( excluding interest). a. What is the discount or premium from the issuance of the bonds payable? Indicate whethere discount/premium. b. How much is the total interest expense for the whole life of the bond?Danner Company sold $500,000 of 8 percent, 20-year bonds on April 1, 2014, at 105. The semiannual interest payment dates are March 31 and September 30. The market interest rate is 7.5 percent. The company’s fiscal year ends September 30. Use the effective interest method to calculate the amortization. 1. With regard to the bond issue on April 1, 2014:a. How much cash is received?b. How much is Bonds Payable?c. What is the difference between a and b called and how much is it? 2. With regard to the bond interest payment on September 30, 2014:a. How much cash is paid in interest?b. How much is the amortization?c. How much is interest expense? 3. With regard to the bond interest payment on March 31, 2015:a. How much cash is paid in interest?b. How much is the amortization? (Round to the nearest cent.)c. How much is interest expense?
- On January 1, 2018, Ling Services issued $168,000 of six-year, 12% bonds when the market interest rate was 11%. The issue price of the bonds was $177,110. Ling uses the effective-interest method to amortize the bond premium. Semiannual interest payments are made on June 30 and December 31 of each year. How much interest expense will be recorded when the first interest payment is made? (Round the final answer to the nearest dollar.) Can you help me solve this step by step?On June 1, 2006, Janson Bottle Company sold $400,000 in long-term bonds for $351,040. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective-interest method. (a.) Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Make sure all columns and rows are properly labeled. (Round to the nearest dollar.) (b) Assuming that interest and discount amortization are recorded each May 31, prepare the adjusting entry to be made on December 31, 2008. (Round to the nearest dollar.)On December 31, 2018, when the market interest rate is 10%, Willis Realty issues $1,000,000 of 11.25%, 10-year bonds payable. The bonds pay interest semiannually. Willis Realty received $1,077,988 in cash at issuance. Requirements 1. Prepare an amortization table using the effective interest amortization method for the first two semiannual interest periods. (Round to the nearest dollar.) 2. Using the amortization table prepared in Requirement 1, journalize issuance of the bonds and the first two interest payments. Requirement 1. Prepare an amortization table using the effective interest amortization method for the first two semiannual interest periods. (Round to the nearest dollar.) Interest Carrying Cash Paid Expense Amortized Amount 12/31/2018 06/30/2019 12/31/2019 Requirement 2. Using the amortization table prepared in Requirement 1, journalize issuance of the bonds and the first two interest payments. (Record debits first, then credits. Select explanations on the last line of the…
- (Analysis of Amortization Schedule and Interest Entries) The following amortization and interest schedule reflects the issuance of 10-year bonds by Capulet Corporation on January 1, 2011, and the subsequent interestpayments and charges. The company’s year-end is December 31, and financial statements are prepared once yearly. Check the following image for financial statements. Instructions(a) Indicate whether the bonds were issued at a premium or a discount and how you can determine this fact from the schedule.(b) Indicate whether the amortization schedule is based on the straight-line method or the effective-interest method, and how you can determine which method is used.(c) Determine the stated interest rate and the effective-interest rate.(d) On the basis of the schedule above, prepare the journal entry to record the issuance of the bonds on January 1, 2011.(e) On the basis of the schedule above, prepare the journal entry or entries to reflect the bond transactions and accruals for…On January 1, 2018, Lane Unlimited issues a 9%, 10- year bonds payable with a face value of $240,000. The bonds are issued at 105 and pay interest on June 30 and December 31. Journalize the semiannual interest payment and amortization of bond premium on June 30, 2018. I know to journalize I should use: Interest Expense Premium on Bonds Payable Cash But how do i figure out the amount of the interest expense, premium on bonds payable and cash?Angelas Company issued a $500,000, 10 percent, 10-year bond on January 1, 2015, for 113.6 when the effective interest rate was 8 percent. Interest is payable on June 30 and December 31. Using the effective-interest method to amortize all premiums and discounts, how much interest expense should the company record on December 31, 2015?