Cedar City issues $2,000,000, 6% revenue bonds were issued at par on April 1, to build a new water line for the water enterprise fund. Interest is payable every six months. What amount of interest expense should be reported for the year ended December 31? A.) $90,000 B.) $120,000 C.) $0 D.) $60,000
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Cedar City issues $2,000,000, 6% revenue bonds were issued at par on April 1, to build a new water line for the water enterprise fund. Interest is payable every six months. What amount of interest expense should be reported for the year ended December 31?
A.) $90,000
B.) $120,000
C.) $0
D.) $60,000
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- On the first day of its fiscal year, J Co. issued $1,000,000 of five-year, 8% bonds to finance the remodeling of an office building. Interest is payable semiannually. The bonds were issued at an effective interest rate of 11%, resulting in J Co. receiving cash of $886,935. Give the account to be debited, the account to be credited, and the amount to journalize the amortization of the discount/premium at the end of the first year using the straight-line method of amortization. (Amortization of discount/premium is to be recorded annually.) All amounts are to be rounded to the nearest dollar. DATE DESCRIPTION PREF DEBIT CREDIT (1) ? (2) ? Group of answer choices Interest expense debited (1) $11,306; Discount on Bonds Payable credited (2) $11,306 Interest expense debited (1) $11,306; Premium on Bonds Payable credited (2) $11,306 Discount on Bonds Payable debited (1) $11,306; Premium on Bonds Payable (2) credited $11,306…On the first day of its fiscal year, J Co. issued $1,000,000 of five-year, 8% bonds to finance the remodeling of an office building. Interest is payable semiannually. The bonds were issued at an effective interest rate of 11%, resulting in J Co. receiving cash of $886,935. Give the account(s) to be debited (1), the account(s) to be credited (2) , and the amounts to journalize the payment of the first semiannual interest payment. (Amortization of discount/premium is to be recorded annually.) All amounts are to be rounded to the nearest dollar. DATE DESCRIPTION PREF DEBIT CREDIT (1) ? (2) ? Group of answer choices Interest expense debited (1) $80,000; Cash credited (2) $80,000 Cash debited (1) $40,000; Interest expense credited (2) $40,000. Interest expense debited (1) $40,000; Cash credited (2) $40,000.On January 1, the first day of its fiscal year, Chin Company issued $10,000,000 of five-year, 7% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 8%, resulting in Chin Company receiving cash of $9,594,415. Required: A. Journalize the entries to record the following (refer to the Chart of Accounts for exact wording of account titles): 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) 3. Second semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) B. Determine the amount of the bond interest expense for the first year. C. Explain why the…
- 2. Accounting for a Debt Service fund Sun City has a fiscal year beginning January 1, 2012. Established a DSF for the payment of debt on bonds issued by the CPF. The series bonds with a face value of $ 600,000 were sold at 101 on January 3. The bond contract indicates an interest rate of 8% per year, payable every semester. The debt will be paid in 6 payments of $ 100,000 each December 31. The premium was transferred by CPF to DSF. The government approved a special tax levy on property with an estimated income of $ 50,000. For the DSF. In addition, he received a transfer from the GF of $ 100,000. to. Register the budget in the DSF b. Record contributions receivable of $ 55,000, assuming 2% is uncollectible. c. Register the collection of contributions d. It is estimated that the "allowance for uncollectible" is very high and should be reduced by $ 2,000 and increase the "revenue" and. Eliminate $ 1,000 of "property tax" that will be uncollectible F. Register the transfer you…On January 1, the first day of its fiscal year, Jacinto Company issued $6,500,000 of six-year, 7% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 8%, resulting in Jacinto Company receiving cash of $6,194,985. Required: a. Journalize the entries to record the following (refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.): 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) 3. Second semiannual interest payment. The bond discount amortization, using…Purchased $84,000, 10 year, 7% government bonds at 95. Brokerage commission was $250.The semi-annual interest payment dates are March 31 and September 30. how do i record this journal entry?
- On March 2, 2022, 20-year, 3 percent, general obligation serial bonds were issued at the face amount of $3,000,000. Interest of 3 percent per annum is due semiannually on March 1 and September 1. The first payment of $150,000 for redemption of principal is due on March 1, 2023. Fiscal year-end occurs on December 31. What is the interest expenditure in the governmental funds for the fiscal year ending December 31, 2022?On the first day of its fiscal year, Chin Company issued $23,100,000 of five-year, 9% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 10%, resulting in Chin receiving cash of $22,208,059. The fiscal year of the company is the calendar year. Required: a. Journalize the entries to record the following (refer to the Chart of Accounts for exact wording of account titles): 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) 3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) b. Determine the amount of the bond interest expense for the first year. c. Explain why the company was able to issue the bonds for only…On January 1, the first day of its fiscal year, Jacinto Company issued $18,400,000 of five-year, 12% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 14%, resulting in Jacinto Company receiving cash of $17,107,672. a. Journalize the entries to record the following (refer to the chart of accounts for the exact wording of the account titles. 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) 3. Second semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) b. Determine the amount of the bond interest expense for the first year. c. Explain why…
- Sepia Inc. issued bonds for $450,000 that were redeemable in 6 years. They established a sinking fund that was earning 4.87% compounded semi-annually to pay back the principal of the bonds on maturity. Deposits were being made to the fund at the end of every 6 months. a. Calculate the size of the periodic sinking fund deposit. b. Calculate the sinking fund balance at the end of the payment period 8. c. Calculate the interest earned in payment period 9. d. Calculate the amount by which the sinking fund increased in payment period 9.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 $1,000,000Prepare journal entries required by a debt service fund to record the following transactions: a. On January 2, a $5,000,000, 6%, 10-year general obligation serial bond issue is sold at 99. Interest is payable annually on December 31, along with one-tenth of the original principal. b. At year-end, the first serial bond matures, along with interest on the bond issue. c. The general fund transfers cash to meet the matured items. d. A check for the matured items is sent to First Bank, the agent handling the payments. e. Later, the bank reports that the first serial bond has been redeemed. One check for interest of $9,000 was returned by the post office because the bond owner had moved. The bank will search for the new address.