Lincoln County retires a $50 million bond issue when the carrying value of the bonds is $48 million, but the market value of the bonds is $54 million. Lincoln County will record the retirement as a. A debit of $6 million to Loss due to early extinguishment.b. A credit of $6 million to Gain due to early extinguishment.c. No gain or loss on retirement.d. A debit to Cash for $54 million.
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Lincoln County retires a $50 million bond issue when the carrying
a. A debit of $6 million to Loss due to early extinguishment.
b. A credit of $6 million to Gain due to early extinguishment.
c. No gain or loss on retirement.
d. A debit to Cash for $54 million.
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- Raygun County had outstanding $35 million in Series 1998 general obligation bonds on June 30, 2018. The bonds were issued at an interest rate of 10 percent with interest payable on June 30 and December 31. In July 2018, interest rates declined substantially, and the county issued refunding bonds in the amount of $35 million at 5 percent. The proceeds of the refunding bonds were placed in escrow along with $2,800,000 held in the county’s debt service fund as a sinking fund for the 1998 debt. The proceeds of the refunding bonds and the sinking fund amount would be used in December 2018 (the call date) to purchase the 1998 debt at a 3 percent call premium, totaling $1,050,000, plus accrued interest of $1,750,000. The County had $250,000 of unamortized debt issue costs on the 1998 bonds, which it reported in its government-wide financial statements. This amount combined with the call premium resulted in a $3,050,000 “loss” on the refunding. (a) What journal entries should the county make…Ont/2/ 2021, the County of Santa Teresa issued a 20-year-life serial bond with a principal of $8,000,000 and 5% annual interest. Interests are paid on January 1 and July 1 with $400,000 in bonds being retired on each interest payment date. The debt service fund levies property taxes in the amount to cover interest and principal payments. Prepare entries for the Debt Service Fund for the following transactions. 1. Prepare the entries to record the budget for the debt service fund for Year 2021. 2. Prepare the entry to levy the property taxes. 3. Prepare the entry to pay the interest and principal on 7/1/2021.City Slicker Corporation pays $55,000 into a bond sinking fund each year for the future redemption of bonds. During the first year, the fund earns $1,475. When the bonds mature, there is a sinking fund balance of $612,000, and $600,000 is needed to redeem the bonds. Required:Prepare the following general journal entries. a. The initial sinking fund deposit. b. The first year's earnings. c. The redemption of the bonds. d. The return of excess cash to the corporation.
- Sun City issues $47 million of bonds on January 1, 2021 that pay interest semiannually on June 30 and December 31. A portion of the bond amortization schedule appears below: Date Cash Paid Interest Expense Decrease in Carrying Value Carrying Value 01/01/2021 $51,324,372 06/30/2021 $2,350,000 $2,309,597 $40,403 51,283,969 12/31/2021 2,350,000 2,307,779 42,221 51,241,748 1. Were the bonds issued at face amount, a discount, or a premium? multiple choice Discount Premium Face amount 2. What is the original issue price of the bonds? Original price 3. What is the face amount of the bonds? Face amount 4. What is the stated annual interest rate? (Hint: Be sure to provide the annual rate rather than the six-month rate.) Stated annual interest rate % 5. What is the market annual interest rate? (Hint: Be sure to provide the annual rate rather than the six-month rate.)…The Titan retires a $24.6 million bond issue when the carrying value of the bonds is $21.2 million, but the market value of the bonds is $27.8 million. The entry to record the retirement will include: Multiple Choice A debit of $6.6 million to a loss account. No gain or loss on retirement. A credit of $6.6 million to a gain account. A credit to cash for $21.2 million.As of December 31, 2022, Sandy Beach had $9,800,000 in 6.5 percent serial bonds outstanding. Cash of $433,000 is the debt service fund's only asset as of December 31, 2022, and there are no liabilities. The serial bonds pay interest semiannually on January 1 and July 1, with $500,000 in bonds being retired on each Interest payment date. Resources for payment of Interest are transferred from the General Fund, and the debt service fund levies property taxes in an amount sufficient to cover principal payments. Required b. Prepare a statement of revenues, expenditures, and changes in fund balances for the debt service fund for the year ended December 31, 2023. SANDY BEACH Debt Service Fund Statement of Revenues, Expenditures and Changes in Fund Balance For the Year Ended December 31, 2023 Revenues: Appropriations Expenditures: Total Expenditures Excess of Expenditures Over Revenues Other Financing Sources (Uses): Increase in Fund Balance 0 0 0 Fund Balance, January 1, 2023 Fund Balance,…
- As of December 31, 2022, Sandy Beach had $9,600,000 in 5.5 percent serial bonds outstanding. Cash of $541,000 is the debt service fund's only asset as of December 31, 2022, and there are no liabilities. The serial bonds pay interest semiannually on January 1 and July 1, with $500,000 in bonds being retired on each interest payment date. Resources for payment of interest are transferred from the General Fund, and the debt service fund levies property taxes in an amount sufficient to cover principal payments. C. Prepare a balance sheet for the debt service fund as of December 31, 2023.The Titan retires a $25.9 million bond issue when the carrying value of the bonds is $22.6 million, but the market value of the bonds is $29.0 million. The entry to record the retirement will include: Multiple Choice A credit to cash for $22.6 million. No gain or loss on retirement. A debit of $6.4 million to a loss account. A credit of $6.4 million to a gain account.Sun City issues $47 million of bonds on January 1, 2021 that pay interest semiannually on June 30 and December 31. A portion of the bond amortization schedule appears below: Cash paid Interest expense Decrease in carrying value Carrying value Date 01/01/2021 51,324,372 06/30/2021 $2,350,000 $2,309,597 $40,403 51,283,969 12/31/2021 2,350,000 2,307,779 42,221 51,241,748 What is the stated annual interest rate? (Hint: Be sure to provide the annual rate rather than the six-month rate.) Stated annual interest rate % What is the market annual interest rate? (Hint: Be sure to provide the annual rate rather than the six-month rate.) Market annual interest rate % 6. What is the total cash paid for interest assuming the bonds mature in 20 years? Interest paid
- 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…Required information [The following information applies to the questions displayed below.] As of December 31, 2019, Sandy Beach had $8,300,000 in 5.0 percent serial bonds outstanding. Cash of $443,000 is the debt service fund's only asset as of December 31, 2019, and there are no liabilities. The serial bonds pay interest semiannually on January 1 and July 1, with $500,000 in bonds being retired on each interest payment date. Resources for payment of Interest are transferred from the General Fund, and the debt service fund levies property taxes in an amount sufficient to cover principal payments. c. Prepare a balance sheet for the debt service fund as of December 31, 2020. Cash Total Assets SANDY BEACH Debt Service Fund Balance Sheet December 31, 2020 Assets Deferred Inflows of Resources Fund Balances S Total Deferred Inflows of Resources and Fund Balance S 0 0(23) Godwin Corporation retires its bonds at 109 on January 1, after the payment of interest. The face value of the bonds is $620,000. The carrying value of the bonds at retirement is $639,500. The entry to record the retirement will include a: A. credit of $36,300 to Gain on Retirement Bonds. B. credit of $36,300 to Loss on Retirement Bonds. C. debit of $55,800 to Premium on Bonds Payable. D. debit of $19,500 to Premium on Bonds Payable.