FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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On June 30, 2021 the market interest rate is 10% winner corporation issues $850,000 of 11% 30 year bonds payable the bonds pay interest on June 30 and December 31 the company amortize bond premium using the effective interest method use the PV function in excel to calculate the issue of the bonds. The issue price of the bond is.
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- Tushar Ad explanationarrow_forwardAssume that a bond is issued with the following characteristics: Date of bonds: January 1, 2023; maturity date: Dec. 31, 2027; face value: $200,000; Coupon interest rate: 10 percent paid semiannually; market interest rate: 12 percent; issue price: $185,280; bond discount is amortized using the effective interest method of amortization. What is the amount of bond discount amortization for the June 30, 2023, adjusting entry? A) $559 B) $1,117 C) $10,000 D) $11,117arrow_forwardSubject: acountingarrow_forward
- ssarrow_forwardQuestions # 9-13 are based on the following: Jolly Old Co. issued 8% bonds with a face amount of $900,000 on January 1, 2021. The bonds mature on December 31, 2024 (4 years). For bonds of similar risk and maturity the market yield was 10%. Interest is paid semiannually on June 30 and December 31. Date 1/1/2021 6/30/2021 12/31/2021 6/30/2022 12/31/2022 6/30/2023 12/31/2023 6/30/2024 12/31/2024 Payment 36,000 36,000 36,000 36,000 36,000 36,000 36,000 36,000 Effective Interest 42,092 42,396 42,716 43,052 43,404 43,775 44,163 44,570 12. What is the bond price of this issue? A. $847,924 B. $841,832 Increase in Balance 6,092 6,396 6,716 7,052 7,404 7,775 8,163 8,570 10. What is the interest expense for the first year of the bonds? A. $72,000 B. $12,488 C. $84,488 D. $42,396 11. How much of the discount is amortized in the first year? A. $72,000 B. $42,396 C. $84,488 D. $12,488 9. What amount is debited to the Discount on Bonds Payable account on January 1, 2021? A. $58,168 B. $36,000 C.…arrow_forwardWhat the answer for question 18 and 19?arrow_forward
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