Debond Corp. issues £1,000,000 worth of fi ve-year bonds, dated 1 January 2010, whenthe market interest rate on bonds of comparable risk and terms is 6 percent. Th e bondspay 5 percent interest annually on 31 December. What are the sales proceeds of thebonds when issued, and how is the issuance refl ected in the fi nancial statements?
Q: On January 1, 2018, CHE Co. purchased 12% bonds, having a maturity value of P800,000, for P860,652…
A:
Q: On January 1, 2011, Mormont Company issued 9% bonds in the face amount of P2,500,000 which mature on…
A: Premium (discount) upon issuance of bonds = Issue value of the bonds - Face value of the bonds…
Q: Brussels Enterprises Issues bonds at par dated January 12019, that have a \$3,400,000 par value,…
A: Bonds are instrument issued by company acknowledging the debt raised by company . It is a liability…
Q: Prembond Corp. issues £1,000,000 face value of fi ve-year bonds, dated 1 January 2010,when the…
A: A typical calculation often used to discount or amortize a bond, is identified as the effective…
Q: nviro Company issues 8%, 10-year bonds with a par value of $250,000 and semiannual interest…
A: Bonds payable are one of the sources of finance and are shown as liability. If the interest rate is…
Q: On March 1, 2016, VICO Corporation issued at 103 plus accrued interest, 1,000 of its 9%, P1,000…
A: Bonds are a form of loan or debt that is being issued by the company, on which regular interest…
Q: On January 1, 2011, Taguig Company issued 3-year bonds with face value of P5,000,000 at 99. The…
A:
Q: On January 1, 2016, Baddour, Inc., issued 10% bonds with a face amount of $160 million. The bonds…
A:
Q: On January 1, 2006, Wolf Company issued its 10% bonds in the face amount of P5,000,000, which mature…
A: The bonds are issued at premium when market rate is lower than the coupon rate of bonds payable.
Q: On July 1, 2014, Oladipo Corporation issued 11% bonds in the face amount of P2,000,000 that mature…
A: Carrying value is present value of future cash flows discount @5%(10/2)
Q: On January 1, 2016, Colt Co. issued ten-year bonds with a face amount of $1,000,000 and a stated…
A: Introduction: A bond is a fixed responsibility issued by corporations or government entities to pay…
Q: On January 2, 2012, Halcon Company issued 9% bonds in the amount of P8,000,000 which mature on…
A: The bonds are issued at discount when market rate is higher than the coupon rate of bonds payable.
Q: On 1/3/2013, a company purchased 10 bonds with a nominal value of 5000 dinars per bond and bears an…
A: Here in this case we are required to make entry for the purchase of bond and its interest. when we…
Q: On 2 January 2016, ME Ltd (ME) issued $10,000,000 5-year bonds for $10,811,090. The stated coupon…
A: The question is based on the concept of Financial Accounting. As per the Bartleby guidelines we are…
Q: On 2 January 2016, ME Ltd (ME) issued $10,000,000 5-year bonds for $10,811,090. The stated coupon…
A: Years credit cash account Interest expense Jun30, 2017 $500,000 $426,931.00 Dec31, 2017 $500,000…
Q: what will be the issuance price (approximate) of the bonds?
A: Interest payable on the bond for every 6 months = 9000 (300000*6%*6/12) Calculation of present value…
Q: On March 1, 2011, Fast Freight Company sold Rs. 400,000 of its 9 percent, 20-year bonds at 109.9.…
A: Amortization Schedule Date Interest payment Interest Expense Amortization of premium Balance in…
Q: Enviro Company issues 8%, 10-year bonds with a par value of $250,000 and semiannual interest…
A: Given: Company’s issues = 8% Life of bond = 10 years Par value = $ 250,000 Annual market rate = 5 %…
Q: On 2/1/2012, the Union Company issued an amount of 1,500,000 dinars in the form of bonds with a…
A: Callable bonds are those bonds which can be called by the company, at any time prior to maturity,…
Q: The present value of the interest is $3006535. $3174325. $3224305. $2955960.
A: Present Value of Interest = Interest Amount * The present value of an annuity for 16 periods at 6%
Q: Garcia Company issues 10%, 15-year bonds with a par value of $240,000 and semiannual interest…
A: Cash proceeds from the issuance of bonds = Par value of bonds x Issue price %
Q: On January 1, 2006, Ward Company issued its 9% bonds in face amount of P4,000,000, which mature on…
A: The bonds are issued at discount when market rate is higher than the coupon rate of bonds payable.
Q: On January 1, 2011, Boyle Company issued 9% bonds in the face amount of P5,000,000 which mature on…
A: Answer) Calculation of Selling Price of Bonds Face Value of Bonds = P 5,000,000 Annual Coupon rate =…
Q: Global Company issued $1,200,000, 10-year bonds for $1,361,042 on January 1, 2012. The stated…
A: Bond: A bond is a financial instrument in the which borrower would pay the periodic interest to the…
Q: On January 1, 2018, Piper Co. issued ten-year bonds with a face value of $1,000,000 and a stated…
A: Bond- Bonds are debt securities issued by corporations, governments, or other organizations and sold…
Q: On January 1, 2016, Blue Company issued ten-year bonds with a face value of P 1,000,000 and a stated…
A: Face Value of Bond 1000000 Duration 10 years Interest Rate 8% per year Interest Payable…
Q: On January 1, 2006, Naruto Company issued its 9% bonds in face amount of P4,000,000, which mature on…
A: The bonds are issued at discount when market rate is higher than the coupon rate of bonds payable.
Q: Shaw Company issued P5,000,000, 12% bonds on January 1, 2012. The principal of the bonds were paid…
A:
Q: On January 1, 2013, Aldrine Company issued 3 year bonds with face value of P5,000,000 at 99. The…
A: Interest expense is the cost of borrowing money that lender charges a borrower.
Q: On February 1, 2009, Alpha Company issued 5,000 of its P1,000 face value bonds at 110 plus accrued…
A: Formula: Net amount received from the issuance of the bonds = Issue value of the bonds + Accrued…
Q: On January 1, 2014, Buknoy Company purchased serial bonds with face value of P3,000,000 and stated…
A: To find the presert value of bond , we need to discount the future cash flow to find out the present…
Q: On November 1, 2006, Mason Company issued P8,000,000 of its 10-year, 8% term bonds dated October 1,…
A: Bonds are a form of liability being issued by the business, which needs to be paid out by the…
Q: n January 1, 2006, Naruto Company issued its 10% bonds in the face amount of P5,000,000, which…
A: Adjusted unamortized bond premium at year end = Total bond premium - amortized bond premium for the…
Q: At the beginning of current year, Marble Co. issued 10-year bonds with a face amount of P 5,000,000…
A: Total PV of bonds at the time of issuance = PV of Annual Interest Payments + PV of Redemption Value…
Q: On March 1, 2016, Baddour, Inc., issued 10% bonds, dated January 1, with a face amount of $160…
A: 1.Working notes:
Q: On January 1, 2018, Arabian Company purchased serial bonds with face amount of P3,000,000 and stated…
A: A bond is a debt instrument issued by large businesses and government organizations to raise debt…
Q: On January 1, 2018, CEBU Company purchased 12% bonds, having a maturity value of P800,000, for…
A: Bonds refers to the borrowing security issued by the company to raise fund from the market by making…
Q: On 2 January 2016, ME Ltd (ME) issued $10,000,000 5-year bonds for $10,811,090. The stated coupon…
A: Journal entry: It is used to record the business transactions (Economic and non economic) of an…
Q: nviro Company issues 8%, 10-year bonds with a par value of $250,000 and semiannual interest…
A: Solution 1: Cash proceeds = Par value * 87.5% = 250000 *87.5% = $218,750
Q: Debond Corp. issues £1,000,000 face value of fi ve-year bonds, dated 1 January 2010,when the market…
A: A typical calculation often used to discount or amortize a bond, is identified as the effective…
Q: On January 1, 2017, Ellison Co. issued eight-year bonds with a far value of S6,000,000 and a stated…
A: Financial Management: Financial management comprises of two words i.e. Finance and management.…
Q: Garcia Company issues 10%, 15-year bonds with a par value of $280,000 and semiannual interest…
A: Given information Bond life = 15 years x 2 = 30 periods Par value = $280,000 Stated interest rate =…
Q: On January 2, 2016, Concrete Master Construction, Inc. issued $500,000, 10-year bonds for $574,540.…
A: Bonds refer to the borrowing security that is issued by the company to raise finds from the market…
Q: On January 1, 2022, Fancy Co issued $100,000 in 10 year bonds. The bonds have a stated rate of 5%…
A: This question relates to bond amortization journal entries.
Q: At the beginning of current year, Marble Co. issued 10-year bonds with a face amount of P 5,000,000…
A: PV of Principal = PV of Coupon Payments + PV of Redemption Value PV of Coupon Payments = Coupon…
Q: The Smart Company sold Rs. 500,000 of 8 percent, 20-year bonds on April 1, 2011, at 105. The…
A: Hi student Since there are multiple subparts, we will answer only first three subparts. If you want…
Debond Corp. issues £1,000,000 worth of fi ve-year bonds, dated 1 January 2010, when
the market interest rate on bonds of comparable risk and terms is 6 percent. Th e bonds
pay 5 percent interest annually on 31 December. What are the sales proceeds of the
bonds when issued, and how is the issuance refl ected in the fi nancial statements?
Step by step
Solved in 2 steps with 2 images
- 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. $15,000On 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.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?
- Debond Corp. issues £1,000,000 face value of fi ve-year bonds, dated 1 January 2010,when the market interest rate is 6 percent. Th e sales proceeds are £957,876. Th e bondspay 5 percent interest annually on 31 December.1 . What is the interest payment on the bonds each year?2 . What amount of interest expense on the bonds would be reported in 2010 and 2011using the eff ective interest rate method?3 . Determine the reported value of the bonds (i.e., the carrying amount) at 31 December 2010 and 2011, assuming the eff ective interest rate method is used to amortisethe discount.4 . What amount of interest expense on the bonds would be reported under thestraight-line method of amortising the discount?Prembond Corp. issues £1,000,000 face value of fi ve-year bonds, dated 1 January 2010,when the market interest rate is 4 percent. Th e sales proceeds are £1,044,518. Th e bondspay 5 percent interest annually on 31 December.1 . What is the interest payment on the bonds each year?2 . What amount of interest expense on the bonds would be reported in 2010 and 2011using the eff ective interest rate method?3 . Determine the reported value of the bonds (i.e., the carrying amount) at 31 December2010 and 2011, assuming the eff ective interest rate method is used to amortise thepremium.On January 1, 2018, Wawatosa Inc. issued 7-year bonds with a face value of $100,000 and a stated interest rate of 10% payable semi-annually on July 1 and January 1. The bonds were sold to yield 8%. A. Assuming the bonds were sold at 104.732, what is the selling price of the bonds? $fill in the blank 1 B. Were they issued at a discount or a premium?
- Metlock Ltd. issued a $791,000, 10-year bond dated January 1, 2023. The bond was sold to yield 12% effective interest. The bond paid 10% interest on January 1 and July 1 each year. The company's year-end was December 31, and Metlock followed IFRS. Using 1. factor Tables 2. a financial calculator, or 3. Excel function PV, calculate the amount received for the bond, and any discount or premium on the bond. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ORDINARY ANNUITY OF 1. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places e.g. 58,971.) Proceeds from sale of bond Discount on bond Prepare the journal entries for above transactions. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the…Waterway Ltd. issued a $1,062,000, 10-year bond dated January 1, 2023. The bond was sold to yield 12% effective interest. The bond paid 10% interest on January 1 and July 1 each year. The company's year-end was December 31, and Waterway followed IFRS. Using 1.factor Tables 2. a financial calculator, or 3. Excel function PV, calculate the amount received for the bond, and any discount or premium on the bond. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1 (Round present value factor calculations to 5 decimal places, eg. 1.25124 and final answers to 0 decimal places eg. 58,971.) Proceeds from sale of bond on bond Date $ $ Prepare the journal entries for above transactions. (Round answers to O decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.…On January 1, 2018, Wawatosa Inc. issued 10-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%. A. Assuming the bonds were sold at 108.732, what is the selling price of the bonds? $___________ B. Were they issued at a discount or a premium? __________
- On January 1, 2021, GLITTER Company issued 10% bonds dated January 1, 2021 with a face amount of ₱8,000,000. The bonds mature on December 31, 2026. For bonds of similar risk and maturity, the market yield is 14%. Interest is paid semi-annually on June 30 and December 31. (Use at most, 4 decimalplaces for PV factors) REQUIREMENTS: a. How much is the interest expense for the year ended, December 31, 2021?b. How much is the interest expense for the year ended, December 31, 2022? c. What is the carrying amount of the bonds on December 31, 2022?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?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?