Pina Co. is building a new hockey arena at a cost of $2,510, 000. It received a downpaymentof $490,000 from local businesses to support the project, and now needs to borrow $2,020,000 to complete the project. It therefore decides to issue $2,020,000 of 10.0 %, 10-year bonds. These bonds were issued on January 1, 2024, and pay interest annually on eachJanuary 1. The bonds yield 9% . Assume that on July 1, 2027, Pina Co. redeems half of thebonds at a cost of $1,079, 300 plus accrued interest. Prepare the journal entry to record thisredemption.

If Stated rate of interest is more than market rate of interest than selling price of Bonds will be…

Answered: Pina Co. is building a new hockey arena…

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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Cheyenne Co. is building a new hockey arena at a cost of $2,460,000. It received a downpayment of $500,000 from local businesses to support the project and now needs to borrow $1,960,000 to complete the project. It therefore decides to issue $1,960,000 of 10%, 10-year bonds. These bonds were issued on January 1, 2019, and pay interest annually on each January 1. The bonds yield 9%. Collapse question part(a) Correct answer. Your answer is correct.Prepare the journal entry to record the issuance of the bonds on January 1, 2019. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) DateAccount Titles and ExplanationDebitCreditJanuary 1, 2019Entry field with correct answerCashEntry field with correct answer2,085,786Entry…

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