FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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On May 1, Holiday Company issued $200,000, 9%, 10-year bonds for $213,591 when the market rate was 8%.
Prepare the general
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- On the first day of the fiscal year, a company issues a $1,450,000, 5%, five-year bond that pays semiannual interest of $36,250 ($1,450,000 × 5% × ½), receiving cash of $1,408,720. Journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. Refer to the Chart of Accounts for exact wording of account titles. Chart of Accounts CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 111 Petty Cash 121 Accounts Receivable 122 Allowance for Doubtful Accounts 126 Interest Receivable 127 Notes Receivable 131 Merchandise Inventory 141 Office Supplies 191 Land 194 Office Equipment 195 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 221 Salaries Payable 231 Sales Tax Payable 232 Interest Payable 241 Notes Payable 251 Bonds Payable 252 Discount on Bonds Payable 253 Premium on Bonds Payable EQUITY 311 Common Stock 312…arrow_forwardOn Jan. 1, Year 1, Foxcroft Inc. issued 100 bonds with a face value of $1,000 each for $104,000. The bonds had a stated rate of 6% and paid interest semiannually. Premium on Bonds Payable Interest Income Discount on Bonds Payable Interest Expense Cash Bonds Payable What is the journal entry to record the issuance of the bonds? What is the journal entry to record the first interest payment?arrow_forwardOn the first day of the fiscal year, a company issues a $784,000, 6%, 10-year bond that pays semiannual interest of $23,520 ($784,000 x 6% x 1/2), receiving cash of $823,200. Journalize the entry for the first interest payment and amortization of premium using the straight-line method. If an amount box does not require an entry, leave it blank. OUDarrow_forward
- On the first day of the fiscal year, a company issues an $994,000, 7%, 5-year bond that pays semiannual interest of $34,790 ($994,000 x 7% x 1/2), receiving cash of $934,400. Journalize the entry for the first interest payment and the amortization of the related bond discount using the straight-line method. If an amount box does not require an entry, leave it blank. Previousarrow_forwardOn January 1, a company issues 9%, five-year bonds with a par value of $109,000 and semiannual interest payments. Following are the first few rows of the straight-line amortization table. (0) (1) (2) January 1, issuance June 30, first payment December 31, second payment Prepare journal entries for the following transactions. January 1 June 30 Bond issuance. First interest payment. December 31 Second interest payment. Semiannual Period-End View transaction list 1 2 3 Record the issuance of the bonds on January 1. Record the first interest payment on June 30. Unamortized Premium $ 8,291 7,462 6,633 Record the second interest payment on December 31. X Carrying Value $ 117,291 116,462 115, 633arrow_forwardOn the first day of the fiscal year, a company issues a $4,900,000, 6%, 6-year bond that pays semiannual interest of $147,000 ($4,900,000 × 6% × ½), receiving cash of $4,440,130. Journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.arrow_forward
- On the first day of the fiscal year, a company issues a $3,400,000, 7%, 10-year bond that pays semiannual interest of $119,000 ($3,400,000 x 7% x 12), receiving cash of $2,764,428. Using straight-line amortization, journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. DOarrow_forwardOn January 1, the first day of the fiscal year, a company issues an $2,250,000, 12%, five-year bond that pays semiannual interest of $135,000 ($2,250,000 x 12% x ½), receiving cash of $2,379,360. Required: Journalize the first interest payment and the amortization of the related bond premium. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.arrow_forwardOn the first day of the fiscal year, a company issues an $565,000, 9%, 5-year bond that pays semiannual interest of $25,425 ($565,000 x 9% x 1/2), receiving cash of $531,100. Journalize the entry to record the first interest payment and the amortization of the related bond discount using the straight-line method. If an amount box does not require an entry, leave it blank. Interest Expense Discount on Bonds Payable Casharrow_forward
- On the first day of the fiscal year, a company issues a $674,000, 7%, 10-year bond that pays semiannual interest of $23,590 ($674,000 x 7% x 1/2), receiving cash of $707,700. Journalize the entry for the first interest payment and amortization of premium using the straight-line method. If an amount box does not require an entry, leave it blank.arrow_forwardOn Jan. 1, Year 1, Foxcroft Inc. issued 120 bonds with a face value of $1,020 for $126,300. The bonds had a stated rate of 5% and paid interest semi-annually. What is the journal entry to record the issuance of the bonds? If an amount box does not require an entry, leave it blank. Jan. 1arrow_forwardOn the first day of the fiscal year, a company issues a $896,000, 7%, 10-year bond that pays semiannual interest of $31,360 ($896,000 x 7% x 1/2), receiving cash of $940,800. Journalize the entry for the first interest payment and amortization of premium using the straight-line method. If an amount box does not require an entry, leave it blank.arrow_forward
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