Problem 1 Hurts Company issued $500,000, 25-year, 6% bonds on 1/1/17. These bonds pay interest semi-annually on June 30 and December 31. On the issue date, the market rate of interest was 5%, resulting in a price of 101.5. 1) Determine the issue price of the bond 2) Complete the Amortization Schedule through 12/31/2018. 3) Prepare all necessary bond journal entries for 2017. 4) How would the bond be reported on the balance sheet on December 31, 2018? 5) Record the retirement of the bonds on January 1, 2019, assuming that all of the bonds were called in at a price of 103.

Problem 1 Hurts Company issued $500,000, 25-year, 6% bonds on 1/1/17. These bonds pay interest semi-annually on June 30 and December 31. On the issue date, the market rate of interest was 5%, resulting in a price of 101.5. 1) Determine the issue price of the bond 2) Complete the Amortization Schedule through 12/31/2018. 3) Prepare all necessary bond journal entries for 2017. 4) How would the bond be reported on the balance sheet on December 31, 2018? 5) Record the retirement of the bonds on January 1, 2019, assuming that all of the bonds were called in at a price of 103.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Answer in step by step solution
Kingbird corporation issued $460,000 8% 20 year bond on January 1,2022 for $418,008.this price resulted in an effective interest rate of 9% on the bonds. Interest is payable annually on January 1. Kingbird uses the effective interest method to amortize bond premium or discount. Prepare the journal entry to record the payment of interest on January 1 2023
1)
please provide correct answer
aj.7
Credit On January 1, 2023, a company issued 5-year, 7% bonds with a par value of $400,000. The market rate when the bonds were issued was 6.5%. The bonds pay interest semiannually, and the company received $408,422 for the bond. a. Journalize the issuance of the bond. DATE 1 23 Debit
solve
Subject: acounting
Aggies Inc. issued bonds with a $450,000 face value, 8% interest rate, and a 4-year term on July 1, 2018, and received $510,000. Interest is payable semi-annually. The premium is amortized using the straight-line method. A. July 1, 2018: entry to record issuing the bonds B. Dec. 31, 2018: entry to record payment of interest to bondholders C. Dec. 31, 2018: entry to record amortization of premium Prepare journal entries for the above transactions. If an amount box does not require an entry, leave it blank. A. fill in the blank 2 fill in the blank 3 fill in the blank 5 fill in the blank 6 fill in the blank 8 fill in the blank 9 B. fill in the blank 11 fill in the blank 12 fill in the blank 14 fill in the blank 15 C.
please answer do not image format
Problem No. 4 On December 31, 2014, YEN Inc. issued a 3-year P4,500,000 serial bonds payable with 10% interest payable every December 31 starting in 2015. The P4,500,000 bonds is payable through equal annual installment every December 31. The effective interest rate of the bonds is 8%. 8. What is the initial measurement of the bonds payable on December 31, 2014? 9. What is the interest expense for the year ended December 31, 2015? 10. What is the carrying value of bonds payable on December 31, 2016?
Bonds Payable On January 1, 2018, Thomas Company issued $100,000, 5-year, 12% bonds, with interest payable semi-annually, at an effective (market rate) of 10%. Use the present value factors from Exhibit 5 and 7 on pages 559 and 560, respectively from the textbook to calculate the price of the bonds at issuance. Prepare the journal entries to record the following: 1. 1/1/2018 issuance of the bonds for cash 2. 6/30/2018 semi-annual interest payment assuming straight line amortization 3. 12/31/2018 semi-annual interest payment assuming straight line amortization 4. 1/1/2019 redemption of the bonds at a price of 115. Please answer the following questions: 1. What was the total interest expense for the year 2018 reflected on the income statement? 2. What was the total amount borrowed? 3. Calculate the effective rate of interest for the year (Interest Expense/Total Amount Borrowed) and round to the nearest percent. Is this rate more indicative of the market rate or contract rate? Do you…