Federal Semiconductors issued 11% bonds, dated January 1, with a face amount of $800 million on January 1, 2021. The bonds sold for $739,814,813 and mature on December 31, 2040 (20 years). For bonds of similar risk and maturity the market yield was 12%. Interest is paid semiannually on June 30 and December 31. Required: 1. to 3. Prepare the journal entries to record their issuance by Federal on January 1, 2021, interest on June 30, 2021 (at the effective rate) and interest on December 31, 2021 (at the effective rate). 4. At what amount will Federal report the bonds among its liabilities in the December 31, 2021, balance sheet? Complete this question by entering your answers in the tabs below. Req 1 to 3 Req 4 ....... At what amount will Federal report the bonds among its liabilities in the December 31, 2021, balance sheet? (Enter your answers in whole dollars.) Cash Interest Paid Bond Interest Discount Amortization Period-End Expense Carrying Value 01/01/2021 06/30/2021 12/31/2021 < Req 1 to 3

Federal Semiconductors issued 11% bonds, dated January 1, with a face amount of $800 million on January 1, 2021. The bonds sold for $739,814,813 and mature on December 31, 2040 (20 years). For bonds of similar risk and maturity the market yield was 12%. Interest is paid semiannually on June 30 and December 31. Required: 1. to 3. Prepare the journal entries to record their issuance by Federal on January 1, 2021, interest on June 30, 2021 (at the effective rate) and interest on December 31, 2021 (at the effective rate). 4. At what amount will Federal report the bonds among its liabilities in the December 31, 2021, balance sheet? Complete this question by entering your answers in the tabs below. Req 1 to 3 Req 4 ....... At what amount will Federal report the bonds among its liabilities in the December 31, 2021, balance sheet? (Enter your answers in whole dollars.) Cash Interest Paid Bond Interest Discount Amortization Period-End Expense Carrying Value 01/01/2021 06/30/2021 12/31/2021 < Req 1 to 3

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Hillside issues $1,900,000 of 5%, 15-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,641,812. Required: 1. Prepare the January 1 journal entry to record the bonds’ issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization. 2(c) For each semiannual period, complete the table below to calculate the bond interest expense. 3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 4. Prepare the first two years of a straight-line amortization table. 5. Prepare the journal entries to record the first two interest payments.
On January 1, 2020, Ehrlich Corporation issued 7%, 15-year bonds with a face amount of $5,000,000 .InstructionsPrepare the following entries: Round to the nearest dollar when necessary.a. record the issuance of the bonds on 1/1/20, assuming the bonds were issued at 102b. prepare the entry for the interest accrual and amortization on 12/31/20.c. calculate the balance of the unamortized premium and the carrying value of the bond at 12/31/20. Show your calculations.d. record the issuance of the bonds on 1/1/20, assuming the bonds were issued at 100e. prepare the entry for the redemption of the bonds at maturity
On July 1, 2020, Center Company issued for $598,964, 10%, 20-year bonds with a face value of $500,000. Interest is paid semiannually on December 31 and June 30. The bonds were issued to yield 8%. Center uses the effective interest method to amortize any bond discount or premium. What is the carrying amount of the bonds on Center's December 31, 2021, balance sheet? Select one: о a. $597,922 O b. $594,802 c. $595,713 O d. $596,839 e. $591,542
On January 1, 2020, Cullumber Company issued $400,000, 10%, 10-year bonds at face value. Interest is payable annually on January 1.(a) Prepare the journal entry to record the issuance of the bonds. Date Account Titles and Explanation Debit Credit Jan. 1 (b) Prepare the journal entry to record the accrual of interest on December 31, 2020. Date Account Titles and Explanation Debit Credit Dec. 31 (c) Prepare the journal entry to record the payment of interest on January 1, 2021. Date Account Titles and Explanation Debit Credit Jan. 1
Hawar Company issued $400,000 of bonds on January 1, 2020. Required: Prepare the journal entry to record the redemption of the bonds before maturity at 97. Assume the balance in Premium on Bonds Payable is $4,000. For the toolbar presS ALT+F10 (PC) or ALT+EN+F10 (Mac)
Ellis Company issues 6.5%, five-year bonds dated January 1, 2021, with a $250,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $255,333. The annual market rate is 6% on the issue date. Required: 1. Compute the total bond interest expense over the bonds' life. 2. Prepare an effective interest amortization table for the bonds' life. 3. Prepare the journal entries to record the first two interest payments.
On January 1, 2020, PS ind issued P600,000 of 7% bonds, due in 10 years. The bonds were issued for P559,231, and pay interest each July 1 and January 1. It uses the effective- interest method. Prepare the company's journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Assume an effective-interest rate of 8%.
On August 1, 2022, Bramble Corp. issued $482,400, 8%, 10-year bonds at face value. Interest is payable annually on August 1. Bramble’s year-end is December 31. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Aug. 1 enter an account title to record the issuance of the bonds on August 1 enter a debit amount enter a credit amount enter an account title to record the issuance of the bonds on August 1 enter a debit amount enter a credit amount eTextbook and Media List of Accounts Prepare the journal entry to record the accrual of interest on December 31, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 enter an…
On January 1, 2018, Nebal Manufacturing Corporation issued $5,000,000, 10%, 6-year bonds dated January 1, 2018, at 105. The bonds pay semi-annual interest on January 1 and July 1. The company uses the straight-line method of amortization and has a December 31, year end. Instructions: Prepare the journal entries to record the following: The issuance of bonds on January 1, 2018. The payment of interest and the discount (or premium) amortization on July 1, 2018. The accrual of interest and the discount (or premium) amortization on December 31, 2018. The payment of interest on January 1, 2019.
The Gorman Group issued $930,000 of 11% bonds on June 30, 2021, for $1,009,794. The bonds were dated on June 30 and mature on June 30, 2041 (20 years). The market yield for bonds of similar risk and maturity is 10%. Interest is paid semiannually on December 31 and June 30. Required: 1.to3. Prepare the journal entries to record their issuance by The Gorman Group on Jun 30, 2021, interest on December 31, 2021, and interest on June 30, 2022 (at the effective rate). Record the issuance of the bond on June 30, 2021. Record the interest on December 31, 2021 (at the effective rate). Record the interest on June 30, 2022 (at the effective rate).
On November 1, 2021, Sneezy Ltd. issued $10 million in 4 year, 8% debenture bonds, Interest is payable semi-annually on May 1 and November 1. When the bonds were issued, yields in the bond market were 8.5%. The company policy is to amortize bond premiums and discounts on a straight line basis. Sneezy Ltd. has a January 31 year end. Required: 1. Prepare all journal entries to record transactions related to the bond from November 1, 2021 to November 1, 2022, in Sneezy Ltd.'s financial records. 2. Clearly show how this financial information, related to the bond, will be reflected on the Statement of Financial Position and in the Income Statement of Sneezy Ltd. at the fiscal year end.
Moore Inc. issued bonds with a $500,000 face value, 8% interest rate, and a 4-year term on July 1, 2020 and received $475,000. Interest is payable annually. The discount is amortized using the straight-line method. Prepare journal entries for the following transactions. A. July 1, 2020: entry to record issuing the bonds. B. June 30, 2021: entry to record payment of interest to bondholders. C. June 30, 2021: entry to record amortization of discount. D. June 30, 2022: entry to record payment of interest to bondholders. E. June 30, 2023: entry to record amortization of discount.