2) An individual purchased a $80,000 bond on its issue date, September 1, 2023. Thebond pays interest at maturity, August 31, 2025, at a rate of 5% compounded annually.What amount of interest must be included in income in 2023 and 2024, respectively?A $4,000 and $4,200B $4,200 and $4,000C $4,000 and $4,000D $4,200 and $4,200E None of these

The term "bonds" refers to the debt-like financial instruments that are issued by the issuers such…

Answered: 2) An individual purchased a $80,000…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

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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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Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $540,000. Interest is payable annually. The premium is amortized using the straightline method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. June 30, 2019: entry to record payment of interest to bondholders C. June 30, 2019: entry to record amortization of premium D. June 30, 2020: entry to record payment of interest to bondholders E. June 30, 2020: entry to record amortization of premium
Dixon Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $480,000. Interest is payable annually. The discount is amortized using the straight-line method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. June 30, 2019: entry to record payment of interest to bondholders C. June 30, 2019: entry to record amortization of discount D. June 30, 2020: entry to record payment of interest to bondholders E. June 30, 2020: entry to record amortization of discount
On July 1, a company sells 8-year $250,000 bonds with a stated interest rate of 6%. If interest payments are paid annually, each interest payment will be ________. A. $120,000 B. $60,000 C. $7,500 D. $15,000
On January 1, 2024, an investor paid $299,000 for bonds with a face amount of $360,000. The contract rate of interest is 8% while the current market rate of interest is 10%. Using the effective interest method, how much interest income is recognized by the investor in 2025 (assume annual interest payments and amortization)? rev: 02_26_2021_QC_CS-252921• $30,010.• $30,160.• $29,900.• $28,204.
1. On March 1, 2019, Company B issued $1,000,000, 10 yeara, 12% bonda at 103 excluding accrued interest. The bonds are dated January 1, 2019 and will mature on January 1, 2029. The interest is payable semi-annually on January 1 and July 1 of each year. Company B paid transaction costs amounting to $50,000. How much would be the net cash receipts of Company B as a result of the bond issuance? $1,000,000 $1,030,000 $980,000 $1,050,000 O O O O
(C) On April 30,2020, ABC Corp. purchased bonds with a face value of P1,400,000 and interest rate of 9% to be paid annually every Dec. 31 until the end of 2024. It paid P1,360,000 plus accrued interest plus transaction fee of P10,000. What is the journal entry to record the purchase if ABC accounted it as a FA-FV-PL? Use Accrued Interest Receivable in your answer. You may use parenthetical solutions. In the google form, provide the total cash outflow relating to the acquisition. IDL On Jan. 1.2021 ARC.nurcbased bonds for then of both
(C) On April 30,2020, ABC Corp. purchased bonds with a face value of P1,400,000 and interest rate of 9% to be paid annually every Dec. 31 until the end of 2024. It paid P1,360,000 plus accrued interest plus transaction fee of P10,000. What is the journal entry to record the purchase if ABC accounted it as a FA-FV-PL? Use Accrued Interest Receivable in your answer. You may use parenthetical solutions. In the google form, provide the total cash outflow relating to the acquisition.
On January 1, 2021, an investor paid OR291, 000 for bonds with a principal amount of OR300,000. The stated rate of interest is 8% while the current market rate of interest is 10%. Using the effective interest method, how much interest income is recognized by the investor in 2021 (assume ?annual interest payments and amortization)
Show your solution in good accounting form On April 1, 2021, ORANGE Inc. issued at 97 including accrued interest, 2,000 of its 10%,₱1,000 bonds. The bonds are dated January 1, 2021, to mature on January 1, 2031. Interest is payable semi-annually on January 1 and July 1. From the bond issuance, how much net cash did ORANGE receive? a. ₱1,890,000 b. ₱1,965,000 c. ₱1,940,000 d. ₱1,990,000
On January 1, 2021, Jackie Company issued at 76 (gross of issuance costs of P46,260), 6% bonds which required interest payments of P450,000 every December 31 for 5 years. 1 How much is the interest expense for 2021? 2 How much is the carrying amount of the bonds as of December 31, 2022? 3 How much is the discount amortization during 2023?
The entity purchased 6,000,000 12% bonds on January 1,2021. The interest is payable annually. The bond indenture indicates that the bonds must be payable for 3 equal annual installment starting Dec.31,2021. The effective interest of the bond is 14%. How much is the interest income on 2022? 567,456 545,866 570,000 480,000

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