LO 4Exercise 10-16A Straight-line amortization for bonds issued at a discountOn January 1, 2011, Akers Co. issued $200,000 of five-year, 6 percent bonds at 96. Interest ispayable annually on December 31. The discount is amortized using the straight-line method.RequiredPrepare the journal entries to record the bond transactions for 2011 and 2012.

SOLUTION:- Face Value of bonds = $ 200,000 issue price of the bond = $ 96 no of bonds issued =…

Answered: Prepare the journal entries to record…

Business

Accounting

Prepare the journal entries to record the bond transactions for 2011 and 2012.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: What is the amount of bond interest expense for the first year?

A: Solution: Bond interest expense for first year = Interest expense for first semiannual period +…

Q: On July 1, 2023, Sheffield Aggregates Ltd. purchased 7% bonds with a maturity value of $135,000 for…

A: Journal entry is the initial record of the transactions in the books of accounts it includes at…

Q: For each of the following items, specify whether the information would most likely be found on the…

A: INCOME STATEMENT Income statement Shows the Profitability of the Company. It include all Revenue…

Q: Explain Recording Bonds at Issuance.

A: Bond at issuance is recorded at: Par Premium Discount

Q: Explain bonds issue between interest dates with examples.

A: Bonds are typically issued at interest dates in order to smoothen the flow of interest and…

Q: Financial Statement Statement Classification Discount on Long-term Bonds Payable Mortgage Notes…

A: Solution 1. Discount on bonds payable is a liability valuation account, that reduces the face amount…

Q: Central Bank of Oman issues the Government Development bonds to finance

A: Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing…

Q: View Policies Show Attempt History Current Attempt in Progress On January 1, 2020, Teal Company sold…

A: The bonds are issued at premium when market rate is lower than the coupon rate of bonds.

Q: Show the effects of all the above transactions on Moon’s Balance Sheet as of 12/31/2022 and Income…

A: There are transactions over which the company’s financial statements are effected which is the…

Q: Evaluate other major issues related to investments in debt and equity securities.

A: Business owners can utilize a variety of financing resources, initially broken into two categories,…

Q: Journalize issuance of the bond and the first semiannual interest payment under each of the three…

A: 1 Market rate is equal to stated interest rate, so bonds will be issued at par Cash a/c…

Q: Transactions associated with the financing process include all of the following except: Select one:…

A: Business Financing -A small firm can obtain capital through various methods. A financial…

Q: The Excel formula to compute the accrued days in PH Bonds

A: The excel formula to calculate the accrued days is DAYS360.

Q: The following bond transactions occurred during 2024 for the YU Institute of Higher Learning (YU)…

A: The bond interest is computed as cash interest and interest expense if a bond is issued at a premium…

Q: How does the accounting for investments vary according to the type of investment (i.e., negotiable…

A: The accounting treatment regarding the investment plans depends upon which investment has been…

Q: Ashvin

A: Certainly, here's the working for each journal entry:1. **January 1, 2020:** - Timber Corporation…

Q: Which of the following is true of the Premium on Bonds Payable account? (The bonds are due in ten…

A: Option 4 is the appropriate choice.

Q: Prepare the journal entry for issuing a bond when it sells at face value, at a premium and at a…

A: Bonds Issued at par Particulars Debit Credit Cash/Bank A/c xxx…

Q: The management of Kunkel Company is considering the purchase of a $20,000 machine that would reduce…

A: 1) Net present value of the investment in the machine:- First of all we need to calculate Present…

Q: Journalize the bond issuance. If an amount box does not require an entry, leave it blank.

Q: Explain face amount, discount, and premium relating to bond issuance.

A: Face value is also known as par value. Face amount of bond issuance is the amount on which coupon…

Q: Ruth Lewis Inc. has issued three types of debt on January 1, 2025, the start of the company's fiscal…

A: A bond write is essentially a formal document or certificate issued by a borrower (often a…

Q: The document that shows a bondholders' purchase of bonds, the par value of the bonds, stated…

A: The correct answer is: (D) Bond certificate The receipt of purchase would not have information…

Q: On March 1 of the current year (2022), Red Robin issued 725, 7.9% bonds with a face value of $1,000…

A: Bond is an financial instrument which is used to raise funds by the large organizations. Bonds pays…

Q: Write a detailed note on Corporate Bonds.

A: Bond is the debt instrument which is securitized as tradeable assets. It is kind of fixed income…

Q: If a bond is retired before maturity, the journal entry to record the retirement by the issuer will…

A: Organization can raise finance either through equity or debt.Since Bond being a debt issued to raise…

Q: At what amount should trading, available-for-sale, andheld-to-maturity debt securities be reported…

Q: How to calculate interest on bonds and how to journalize the interest.

A: Interest on bonds is computed on the basis of the rate mentioned on the bond on the face value of…

Q: , Journal entry worksheet: 1. Record the bond issue. (Jan. 01, 2021) 2. Record the first…

A: Formula: Interest expense = Bond value x Time period x interest rate.

Q: Demonstrate how to identify and account for debt investments classified for reporting purposes as…

A: A debt security is a type of investment tool in which the bonds are issued by a corporation or the…

Q: What is the journal entry to retire bonds at maturity?

A: Retirement of bonds at maturity: The carrying value will be equal to the face value of the bond…

Q: 10. Journal entry worksheet: 1. Record the bond issue. (Jan. 01, 2021) 2. Record the first…

A: Solution:- Preparation of journal entries as follows:- Basic information as follows:- Issue 540,000…

Q: Journalize issuance of the bond and the first semiannual interest payment under each of the three…

A: Bonds payable: It is a long term liability to the organization issuing it. It is issued to raise…

Q: You find a bond quote online listing a bond's price as "91". The bond's current price is $_______.

A: Bond quote is generally expressed as a percentage of its face value. Therefore, considering a face…

Q: On a balance sheet, what valuation must be reported for short-term debt investments in trading…

A: Short term debt investments are those debt funds or mutual funds that are obtained for a short…

Q: Select the journal entry that represents a bond issued at 102. Select one: Cash Discount on bond…

A: Bonds are issued by the company for raising finance. The interest on bonds is a tax-saving item and…

Q: Specify the section of a classified balance sheet in which each of the following accounts would be…

A: Investments.Investments appear under current assets if they are listed as "available for sale" by…

Q: Required a) Explain, including calculations, how the issue of the bond would be accounted for by…

A: On 1st January 2021 Corgi Ltd. issued bonds of £5 million at par value, the bonds are redeemable on…

Q: What is the typical relationship among interest rates onthree-month Treasury bills, long-term…

A: Treasury bills are governmental securities which are risk-free whether issued for short term or long…

Question

LO 4
Exercise 10-16A Straight-line amortization for bonds issued at a discount
On January 1, 2011, Akers Co. issued $200,000 of five-year, 6 percent bonds at 96. Interest is
payable annually on December 31. The discount is amortized using the straight-line method.
Required
Prepare the journal entries to record the bond transactions for 2011 and 2012.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

For a standard U.S. Treasury bond, when are the following characteristics of the bond determined? The amounts of any interest payments. The dates of any interest payments. The bond's market yield. The bond's market price. The amount that the Treasury returns to the bondholder, when the bond matures. The price that the bondholder pays to the Treasury to acquire the bond. The maturity date. 1. 2. Fixed before the bonds are sold and does not change. Fixed when the bonds are sold and does not change. 3. Fluctuates continually.
Demonstrate how to identify and account for debt investments classified for reporting purposes as available-for-sale securities.
How are the bonds issued, what is the appropriate journal entry? Provide example for issuing bonds. How do we determine the present value of a bond when market rate differs from its contract rate? How do we record the interest payment (provide examples for both premium and discount amortization), using the effective interest method? What is the difference between the effective interest method and the straight line method when amortizing either a discount or a premium? Cite and give credit to the author that you are citing.
Write a short note on Securities and Exchange Commission.
I'm trying to figure out what dates I need to use for my journal entries. I have already put July 1 and december 31 in my 2019 journal section and then june 30 for my 2020 section and it keeps telling me I'm wrong I don't get it. My numbers are right just not my dates. Effective Interest Premium Amortization Ex. 14.08 " Prepare the journal entries to record the issue of the bonds on July 1, 2019, and the interest payments on December 31, 2019, and June 30, 2020." Polk Incorporated issued $200,000 of 13% bonds on July 1, 2019, for $206,801.60. The bonds were dated January 1, 2019, pay interest on each June 30 and December 31, are due December 31, 2020, and were issued to yield 12%. Polk uses the effective interest method of amortization. Required: Prepare the journal entries to record the issue of the bonds on July 1, 2019, and the interest payments on December 31, 2019, and June 30, 2020. In addition, prepare a bond interest expense and premium amortization schedule for the bonds…
How to record the inteest on a bond in journal entry form.
Please see below. Need help with this.
How is the retirement of bonds recorded?
Entity A has an incentive compensation plan under which the sales manager receives a bonus equal to 10percent of the company's income after deductions for bonus and income taxes. Income before bonus and incometaxes is P500,000. The effective income tax rate is 30 percent. How much is the amount of bonus (rounded to the nearest peso)?a. 32,710 b. 60,748 c. 30,974 d. 37,210 How much is the amount of income tax?a. 131,776 b. 140,708 c. 138,837 d. 140,187
Eq Ltd contributes to a defined benefit superannuation plan for its employees. The following information is available for the plan at 30 June 2021. Fair value of plan assets (1 July 2020) $94 356 000 Fair value of plan assets (30 June 2021) $95 832 000 Present value of defined benefit obligation (1 July 2020) $98 586 000 Present value of defined benefit obligation (30 June 2021) $103 392 000 Benefits paid $15 552 000 Contributions received $8 640 000 Current service cost $12 096 000 Rate of return on plan assets for the period…