Exercise 14-23 (Algo) Early extinguishment [LO14-5] The balance sheet of River Electronics Corporation as of December 31, 2023, included 11.25% bonds having a face amount of $91.3 million. The bonds had been issued in 2016 and had a remaining discount of $4.3 million at December 31, 2023. On January 1, 2024, River Electronics called the bonds before their scheduled maturity at the call price of 104. Required: Prepare the journal entry by River Electronics to record the redemption of the bonds at January 1, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.

Exercise 14-23 (Algo) Early extinguishment [LO14-5] The balance sheet of River Electronics Corporation as of December 31, 2023, included 11.25% bonds having a face amount of $91.3 million. The bonds had been issued in 2016 and had a remaining discount of $4.3 million at December 31, 2023. On January 1, 2024, River Electronics called the bonds before their scheduled maturity at the call price of 104. Required: Prepare the journal entry by River Electronics to record the redemption of the bonds at January 1, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter10: Long-term Liabilities

Section: Chapter Questions

Problem 10.6E

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Wilbury Corporation issued 1 million of 13.5% bonds for 985,071.68. The bonds are dated and issued October 1, 2019, are due September 30, 2020, and pay interest semiannually on March 31 and September 30. Assume an effective yield rate of 14%. Required: 1. Prepare a bond interest expense and discount amortization schedule using the straight-line method. 2. Prepare a bond interest expense and discount amortization schedule using the effective interest method. 3. Prepare adjusting entries for the end of the fiscal year December 31, 2019, using the: a. straight-line method of amortization b. effective interest method of amortization 4. If income before interest and income taxes of 30% in 2020 is 500,000, compute net income under each alternative. 5. Assume the company retired the bonds on June 30, 2020, at 98 plus accrued interest. Prepare the journal entries to record the bond retirement using the: a. straight line method of amortization b. effective interest method of amortization 6. Compute the companys times interest earned (pretax operating income divided by interest expense) for 2020 under each alternative.
25 The balance sheet of Indian River Electronics Corporation as of December 31, 2020, included 12.25% bonds having a face amount of $90 million. The bonds had been issued in 2013 and had a remaining discount of $3 million at December 31, 2020. On January 1, 2021, Indian River Electronics called the bonds before their scheduled maturity at the call price of 102 Required: Prepare the journal entry by Indian River Electronics to record the redemption of the bonds at January 1, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet Record the redemption of the bonds. Note: Enter debits before credits Date January 01, 2021 Record entry General Journal Clear entry Debit Credit View general journal
View Policies Current Attempt in Progress On January 2, 2015, Sandhill Corporation issued $1,050,000 of 10% bonds at 97 due December 31,2024, Interest on the bonds is payable annually each December 31. The discount on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable "interest method.) The bonds are callable at 102 (i.e, at 102% of face amount), and on January 2, 2020, Sandhill called $630.000 face amount of the bonds and redeemed them. Ignoring income taxes, compute the amount of loss, if any, to be recognized by Sandhill as a result of retiring the $630.000 of bonds in 2020. (Round answer to O decimal places, eg 38,548.) Loss on redemptionS Prepare the journal entry to record the redemption. (Round answers to O decimal places, eg. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when…
Exercise 14-23 (Algo) Early extinguishment [LO14-5] The balance sheet of River Electronics Corporation as of December 31, 2023, included 12.50% bonds having a face amount of $91.8 million. The bonds had been issued in 2016 and had a remaining discount of $4.8 million at December 31, 2023. On January 1, 2024, River Electronics called the bonds before their scheduled maturity at the call price of 105. Required: Prepare the journal entry by River Electronics to record the redemption of the bonds at January 1, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.
View Policies On January 2, 2015, Monty Corporation issued $ 1,950,000 of 10% bonds at 98 due December 31, 2024. Interest on the bonds is payable annually each December 31. The discount on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable "interest method.") Current Attempt in Progress The bonds are callable at 101 (i.e., at 101% of face amount), and on January 2, 2020, Monty called $ 1,170,000 face amount of the bonds and redeemed them. Ignoring income taxes, compute the amount of loss, if any, to be recognized by Monty as a result of retiring the $ 1,170,000 of bonds in 2020. (Round answer to O decimal places, eg. 38,548.) Loss on redemption Prepare the journal entry to record the redemption. (Round answers to O decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented…
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TB Problem 14-183 (Algo) On January... On January 1, 2024, for $18.8 million, Marker Company issued 10% bonds, dated January 1, 2024, with a face amount of $20.8 million. For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. Required: Prepare the journal entry to record interest on June 30, 2024, using the effective interest method. Prepare the journal entry to record interest on December 31, 2024, using the effective interest method.
18 Required information [The following information applies to the questions displayed below.] Temptation Vacations issues $49 million in bonds on January 1, 2024, that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: (1) Date 1/1/2024 6/30/2024 12/31/2024 (2) Cash Paid for Interest Face amount $1,470,000 1,470,000 (3) Interest Expense $1,378,755 1,376,473 (4) Decrease in Carrying Value $91,245 93,527 (5) Carrying Value $55,150, 180 55,058,935 54,965,408 3. What is the face amount of the bonds? (Enter your answer in whole dollars, not millions (i.e., $5.5 million should be entered as 5,500,000).)
st ve this K Kendrick Corporation issued $660,000 of 7%, 10-year bonds payable on March 31, 2019. The market interest rate at the date of issuance was 9%, and the bonds pay interest semiannually Kendrick Corporation's year-end is March 31 Read the requirements. 1. Using the PV function in Excel", calculate the issue price of the bonds. (Round your answer to the nearest whole dollar) The issue price of the bonds is 5 Demodocs ex Requirements 1. Using the PV function in Excel, calculate the issue price of the bonds. 2. Prepare an effective-interest amortization table for the bonds through the first three interest payments. Round amounts to the nearest dollar. 3. Record Kendrick Corporation's issuance of the bonds on March 31, 2019, and payment of the first semiannual interest amount and amortization of the bond i discount on September 30, 2019 Explanations are not required. X k answer correct: 3 (1)
PROBLEM #1: Bakunawa Company sold P300,000 of 10-year bonds on January 1, 2017 to Kayumanggi Corporation. Interest is paid semi-annually. The bond indenture included the following information: Face value P300,000 January 1, 2017 January 1, 2027 14% 12% Date of bonds Maturity date Stated interest rate Effective (market rate of interest) Required: 1. Prepare the journal entry to record the issuance of the bonds. Show supporting calculations for the amounts used in the entry. 2. What is the total interest expense of the Bakunawa Company books for the years ending December 31, 2017 and December 31, 2018 using straight-line amortization? 3. Show how the bonds would be presented on Bakunawa's statement of financial position at December 31, 2018.
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