or all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1. 20Y1 July 1 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar. 20Y1 Dec. 31 b. The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar. 20Y2 June 30

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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For all journal entries, if an amount box does not require an entry, leave it blank.
1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.
20Y1 July 1
2. Journalize the entries to record the following:
a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using
the straight-line method. Round to the nearest dollar.
20Y1 Dec. 31
b. The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the straight-line
method. Round to the nearest dollar.
20Y2 June 30
3. Determine the total interest expense for 20Y1. Round to the nearest dollar.
$
DD
4. Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the
market rate of interest?
5. Compute the price of $5,018,833 received for the bonds by using the Present value at compound interest, and
Present value of an annuity. Round your PV values to 5 decimal places and the final answers to the nearest
dollar. Your total may vary slightly from the price given due to rounding differences.
Present value of the face amount
Present value of the semiannual interest payments
Proceeds of bond issue
Transcribed Image Text:For all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1. 20Y1 July 1 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar. 20Y1 Dec. 31 b. The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar. 20Y2 June 30 3. Determine the total interest expense for 20Y1. Round to the nearest dollar. $ DD 4. Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest? 5. Compute the price of $5,018,833 received for the bonds by using the Present value at compound interest, and Present value of an annuity. Round your PV values to 5 decimal places and the final answers to the nearest dollar. Your total may vary slightly from the price given due to rounding differences. Present value of the face amount Present value of the semiannual interest payments Proceeds of bond issue
Bond discount, entries for bonds payable transactions
On July 1, 20Y1, Livingston Equipment Co., a wholesaler of manufacturing equipment, issued $5,700,000 of 10-year,
9% bonds at a market (effective) interest rate of 11%, receiving cash of $5,018,833. Interest on the bonds is
payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Required:
For all journal entries, if an amount box does not require an entry, leave it blank.
1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.
20Y1 July 1
2. Journalize the entries to record the following:
a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using
the straight-line method. Round to the nearest dollar.
20Y1 Dec. 31
b. The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the straight-line
method. Round to the nearest dollar.
20Y2 June 30
B
3. Determine the total interest expense for 20Y1. Round to the nearest dollar.
$
4. Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the
market rate of interest?
5. Compute the price of $5,018,833 received for the bonds by using the Present value at compound interest, and
Present value of an annuity. Round your PV values to 5 decimal places and the final answers to the nearest
Transcribed Image Text:Bond discount, entries for bonds payable transactions On July 1, 20Y1, Livingston Equipment Co., a wholesaler of manufacturing equipment, issued $5,700,000 of 10-year, 9% bonds at a market (effective) interest rate of 11%, receiving cash of $5,018,833. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1. 20Y1 July 1 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar. 20Y1 Dec. 31 b. The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar. 20Y2 June 30 B 3. Determine the total interest expense for 20Y1. Round to the nearest dollar. $ 4. Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest? 5. Compute the price of $5,018,833 received for the bonds by using the Present value at compound interest, and Present value of an annuity. Round your PV values to 5 decimal places and the final answers to the nearest
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