1. On November 16, 2020, Bilbond issued its 10-year, 7% P1,000,000 convertible bonds at 122. The bonds would have sold for P1,154,435 without the conversion feature. The effective interest rate of similar bonds without the conversion feature is 5%. QUESTION: What is the increase in equity on the date of issuance? 2. On January 1, 2020, Kabond issued a 3- year bond with conversion feature, 9% P1,000,000 at par. Without the conversion feature, the bonds would have sold for 89. Interest is payable semi-annually every June 30 and December 31. On May 30, 2021 the bonds were retired for P1,030,000. At retirement date, the bonds were selling at 91 without the conversion feature. QUESTION: How much was the reduction in the bond conversion privilege at retirement date?

1. On November 16, 2020, Bilbond issued its 10-year, 7% P1,000,000 convertible bonds at 122. The bonds would have sold for P1,154,435 without the conversion feature. The effective interest rate of similar bonds without the conversion feature is 5%. QUESTION: What is the increase in equity on the date of issuance? 2. On January 1, 2020, Kabond issued a 3- year bond with conversion feature, 9% P1,000,000 at par. Without the conversion feature, the bonds would have sold for 89. Interest is payable semi-annually every June 30 and December 31. On May 30, 2021 the bonds were retired for P1,030,000. At retirement date, the bonds were selling at 91 without the conversion feature. QUESTION: How much was the reduction in the bond conversion privilege at retirement date?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On January 1, 2021, Baltimore Company issued $400,000 face value, 5%, 5-year bonds at 103. Baltimore uses the straight-line method for amortization. Use this information to determine the dollar value of the annual bond premium amortization. Round your answer to the nearest whole number (no cents).
On November 16, 2020, Bilbond issued its 10-year, 7% P1,000,000 convertible bonds at 122. The bonds would have sold for P1,154,435 without the conversion feature. The effective interest rate of similar bonds without the conversion feature is 5%. What is the increase in equity on the date of issuance?
On January 1, 2020, Blindo Corp. issued ten - year, 12% bonds with a face value of $ 500,000, with interest payable semi-annually on June 30 and December 31. At the time, the market rate was 10%. Required: a) Find PMT and Use your calculator to calculate the issue price of the bonds. Round the answer to the nearest dollar. b) Independent of your solution to part a), assume that the issue price was $ 562, 000. Prepare the amortization table for 2020. Round values to the nearest dollar.
Accounting 7) On January 1, 2016, Giant Company issued an 8% callable bond which has a par value of $200,000 for $180,000. The bond is callable at 106 any time after January 1, 2020. One-half of the bond was called back on January 1, 2021 when the unamortized discount had a balance of $4,000. Compute the amount of the gain or loss when the bond was retired on January 1, 2021.
Hi there, Can you help with attached questions, thanks kindly.
On February 1, 2024, Strauss-Lombardi issued 9% bonds, dated February 1, with a face amount of $860,000. The bonds sold for $786,220 and mature on January 31, 2044 (20 years). The market yield for bonds of similar risk and maturity was 10%. Interest is paid semiannually on July 31 and January 31. Strauss-Lombardi’s fiscal year ends December 31. Question: 1 to 4. Prepare the journal entries to record their issuance by Strauss-Lombardi on February 1, 2024, interest on July 31, 2024 (at the effective rate), adjusting entry to accrue interest on December 31, 2024 and interest on January 31, 2025. Note: Do not round intermediate calculations and round your final answers to the nearest whole dollar. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
On June 30, 2020, the market interest rate is 2.4%. Colwood Enterprises issues $500,000 of 3.4%, 16-year bonds at 110.625. The bonds pay interest on June 30 and December 31. Colwood amortizes bonds by the effective-interest method. Requirements 1. Prepare a bond amortization table for the first four semi-annual interest periods. 2. Record issuance of the bonds on June 30, 2020, the payment of interest at December 31, 2020, and the semi-annual interest payment on June 30, 2021. Requirement 1. Prepare a bond amortization table for the first four semi-annual interest periods. (Round your answers to the nearest whole dollar.) A B Colwood Enterprises Amortization Table C D Interest Expense Interest Payment (1.2% of Preceding Premium Semi-Annual (1.7% of Maturity Value) Bond Carrying Amount) (A-B) Premium (D-C) Amortization Account Balance Amount ($500,000+ E Bond Carrying D) Interest Date June 30, 2020 Dec. 31, 2020 June 30, 2021 Dec. 31, 2021 June 30, 2022
The Werner Company issued 10-year bonds on January 1, 2020. The debt has a face value of $800,000 and an annual stated interest rate of 6%. Interest payments are due semiannually beginning June 30, 2020. The market interest rate on the bonds is 6%. a.What will this bond be priced at on January 1, 2020? b.More advanced: On January 1, 2023, the market rate of interest for these bonds is 8%. What will you be willing to pay for these bonds on that date?
On October 31, 2021, Flowing Wind Company issued a $3,500,000, 10-year bond at 7% when the market rate was 8%. It was sold at 93, and they will account for interest on the bond using the effective interest rate calculation method. Interest payments are made on April 30, and October 31 of each year. Party Décor Company's year-end is December 31. Required: 1) Prepare the appropriate journal entries related to this bond for 2021, including all calculation 2) Show the bonds payable net value reported on the balance sheet as of December 31, 2021 3) Prepare the journal entry related to the first interest payment in 2022, including all calculations. 4) Assume the bond is redeemed at 94 on May 1, 2022. Record the redemption of the bond with the calculations included
On June 30, 2020, Wayne's Company issued $4,000,000 face value of 13%, 20-year bonds at $4,300,920, a yield of 12%.Wayne uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31. #1. Set up a schedule of interest expense and premium/discount amortization under the effective-interest method. (Hint: The eff ective-interest rate must be computed.) (Please use excel & show all formulas)
On January 1, 2024, ABC Corp. issued 54 million of 10 year bonds at an 8%stated interest rate to be paid annually. ABC Corp. issued the bonds for S3, 501, 514 since the market rate of interest was 10% . What is the carryingvalue of the bond that ABC Corp. would report on its December 31, 2024balance sheet? (round to the nearest dollar) S3,531,665S3, 500,000S3,526,438S3,564,832S4,000,000
On March 1, 2024, Baddour, Incorporated, issued 10% bonds, dated January 1, with a face amount of $160 million. The bonds were priced at $142.00 million (plus accrued interest) to yield 12%. The price if issued on January 1 would have been $139.25 million. Interest is paid semiannually on June 30 and December 31. Baddour’s fiscal year ends September 30. Required: 1. to 3. What would be the amount(s) related to the bonds Baddour would report in its balance sheet, income statement and statement of cash flows for the year ended September 30, 2024?