On January 1, 2023, Crane Ltd. issued $2130000, 5% bonds, which mature on January 1, 2030. The bonds were issued for $2257848to yield 4%. Crane uses the effective interest method of amortizing bond premium. Interest is payable annually on December 31. AtDecember 31, 2023, the adjusted balance in the Bonds Payable account should be$2241662.$2130000.○ $2257848.O $2274034.

Crane Ltd. issued bonds for a premium because the market interest rate (4%) is lower than the coupon…

Answered: On January 1, 2023, Crane Ltd. issued…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On January 1, 2021, Tango Company issued a 10-year 9% bonds payable of P10,000,000 for a market rate of 8.5%. The company incurred P642,007.30 in bond issue costs. The amortization of bond discount was recorded using the effective interest method. Interest will be paid every January 1 of each year. 1. What is the total net proceeds from the issuance of the bond? 2. What is the effective interest rate used? 3. How much was the interest expense for 2021? 4. What is the balance of unamortized discount/premium as of December 31, 2023? ( Premium/discount)
On January 1, 2021, Bicol Company issued 5-year bonds with face value of P 10,000,000 at 95. The nominal rate is 10% and the interest is payable annually on December 31. The Bonds mature on January 1, 2026. The entity paid bond issue cost of P 200,000. 1. What is the effective interest rate? 2. what is the interest expense on 2022?
On January 1, 2022 Company K issued $1,000,000, 5% bonds for $855,000. The market rate of interest for these bonds is 7%. Interest is payable annually on December 31. If Company K uses the effective-interest method of amortizing bond discount, what would be the remaining unamortized bond discount at December 31, 2022? A. $135,150 B. $235,000 C. $238,050 D. $134,500
On January 1, 2016, Mary Co. issued its 10% bonds in the face amount of P 1,500,000 which mature on January 1, 2026. The bonds were issued for P 1,329,000 to yield 12%. Mary uses the effective interest method of amortizing bond discount. Interest is payable semi-annually on July 1 and January 1. For the year ended December 31, 2016 what amount should reported as bonds interest expense?
Oriole Company sold $3,250,000, 9%, 10-year bonds on January 1, 2022. The bonds were dated January 1, 2022, and pay interest on January 1. The company uses straight-line amortization on bond premiums and discounts. Financial statements are prepared annually. 1. Prepare the journal entries to record interest expense for 2022 under both of the bond issuances assuming they sold at: (1) 101 and (2) 95. 2.Show the long-term liabilities balance sheet presentation for issuance of the bonds sold at 101 at December 31, 2022 3. Show the long-term liabilities balance sheet presentation for issuance of the bonds sold at 95 at December 31, 2022. journal entry Date Account titles & explanations Debit Credit 1-Jan-22 Cash($3,250,000 *1.01) $3282500 Premium on bonds $32,500 Bonds payable $3,250,000 (Being bonds issued at premium) 1-Jan-22 Cash(3,250,000 *0.95)…
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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 March 31, 20x7, KEEPU issued for P1,774,000, P2,000,000 face amount of its 10%, P1,000 bonds. The bonds were issued to yield 12%. The bonds are dated July 1, 20x7 and mature on July 1, 20x10. Interest is payable annually on July 1. KEEPU uses the interest method to amortize bond discount. Determine the interest expense of the Bonds on December 31, 20x8. Determine the carrying value of the Bonds on December 31, 20x7.
Hasley Company issued $800,000, 11%, 10-year bonds on December 31, 2018, for $730,000. Interest is payable annually on December 31.The Company uses the straight-line method to amortize bond premium or discount.
On January 1, Vaughn Manufacturing issued $4300000, 7%, 5-year bonds with interest payable on December 31. The bonds sold for $4601860. The market rate of interest for these bonds was 6%. On the first interest date, using the effective-interest method, the debit entry to Interest Expense is for $322130. $258000. $301000. $276112.
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