FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Bond Discount, Entries for Bonds Payable Transactions
On July 1, Year 1, Danzer Industries Inc. issued $6,600,000 of 9-year, 10% bonds at a market (effective) interest rate of 12%, receiving cash of
$5,885,352. Interest on the bonds is payable semiannually, on December 31 and June 30. The fiscal year of the company is the calendar year.
Required:
1. Journalize the entry to record the amount of cash proceeds fram the issuance of the bonds on July 1, Year 1. If an amount box does not require an
entry, leave it blank.
Cash
Discount on Bonds Payable
Bonds Payable
2. Journalize the entries to record the following: If an amount box does not require an entry, leave it blank.
a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond discount, using the straight-line method. (Round
your answer to the nearest dollar.)
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Transcribed Image Text:eBook Show Me How A Calculator Print Item Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1, Danzer Industries Inc. issued $6,600,000 of 9-year, 10% bonds at a market (effective) interest rate of 12%, receiving cash of $5,885,352. Interest on the bonds is payable semiannually, on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds fram the issuance of the bonds on July 1, Year 1. If an amount box does not require an entry, leave it blank. Cash Discount on Bonds Payable Bonds Payable 2. Journalize the entries to record the following: If an amount box does not require an entry, leave it blank. a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond discount, using the straight-line method. (Round your answer to the nearest dollar.) Feedbeck Check My Work ( Previous 8:45 AM 3/28/2020 00 00 00 00
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b. The interest payment on June 30, Year 2, and the amortization of the bond discount, using the straight-line method. (Round your answer to the
nearest dollar)
Ohek My n
Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account.
The straight-line method of amortization provides equal amounts of amortization over the life of the bond.
Leaming Objective 2.
3. Determine the total interest expense for Year 1. Round to the nearest dollar.
4. Wi the bond proceeds always be less than the face amount of the bonds when the contract rabe is less than the market cate of interest?
5. Compute the price of $5.885.352 recelived for the bonds bv using Exhibit 5 and Exhibit 7. (Round vou PV values to 5 decimal places and the final
Ched y Work
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846 AM
3/2/2020
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Transcribed Image Text:agenow.com/im/takeAssignment/takeAssignmentMain.doinvoker atakeAssignmentSessionlocator &inprogress false Print tem BShow Me How Calculator eBook b. The interest payment on June 30, Year 2, and the amortization of the bond discount, using the straight-line method. (Round your answer to the nearest dollar) Ohek My n Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. The straight-line method of amortization provides equal amounts of amortization over the life of the bond. Leaming Objective 2. 3. Determine the total interest expense for Year 1. Round to the nearest dollar. 4. Wi the bond proceeds always be less than the face amount of the bonds when the contract rabe is less than the market cate of interest? 5. Compute the price of $5.885.352 recelived for the bonds bv using Exhibit 5 and Exhibit 7. (Round vou PV values to 5 decimal places and the final Ched y Work (Previous 846 AM 3/2/2020
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