Problem 10-2Declan Company issues a $120,000 on 12/31/X0, 10%, bond that matures in 3 years. Interest ispaid on December 31st of each year. Prepare all journal entries for all years related to this bondissue if it was priced to yield:8%10%12%Problem 10-3Still Declan Company - How about an 9% zero issued on 12/31/X0, due in 3years, face amount of $120,000. How much would you pay? Amortize it.

The objective of the question is to prepare journal entries for a bond issued by Declan Company and…

Answered: Problem 10-2 Declan Company issues a…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter22: Corporations: Bonds

Section: Chapter Questions

Problem 2CE

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On January 1, a company issued a 5-year $100,000 bond at 6%. Interest payments on the bond of $6,000 are to be made annually. If the company received proceeds of $112,300, how would the bonds issuance be quoted? A. 1.123 B. 112.30 C. 0.890 D. 89.05
On October 1 a company sells a 3-year, $2,500,000 bond with an 8% stated interest rate. Interest is paid quarterly and the bond is sold at 89.35. On October 1 the company would collect ________. A. $200,000 B. $558,438 C. $2,233,750 D. $6,701,250
On January 1 a company issues a $75,000 bond that pays interest semi-annually. The first interest payment of $1,875 is paid on July 1. What is the stated annual interest rate on the bond? A. 5.00% B. 2.50% C. 1.25% D. 10.00%
On April 1 a company sells a 5-year, $60,000 bond with a 7% stated interest rate. The market interest on that day was also 7%. If interest is paid quarterly, the company makes interest payments of ________. A. $1,050 B. $3,150 C. $4,200 D. $5,250
On July 1, a company sells 8-year $250,000 bonds with a stated interest rate of 6%. If interest payments are paid annually, each interest payment will be ________. A. $120,000 B. $60,000 C. $7,500 D. $15,000
Problem 10-2 Declan Company issues a $120,000 on 12/31/X0, 10%, bond that matures in 3 years. Interest is paid on December 31st of each year. Prepare all journal entries for all years related to this bond issue if it was priced to yield: 8% 10% 12% Problem 10-3 Still Declan Company - How about an 9% zero issued on 12/31/X0, due in 3 years, face amount of $120,000. How much would you pay? Amortize it.
Problem 4 Ryan Company issues a $100,000 on 8/31/Y1, 10%, bond that matures in 5 years. Interest is paid on August 31st of each year. (Don't need to amortize.) How much would you pay to yield: 8% 10% 14%
a. on january 1, 20x1, your firm issues a $10,000, 5-year, 10% bond with interest payable annually for $10,389. at the time of the issuance, market rates are 9%. journalize the issuance of the bond. debit credit date xix b. journalize the first annual interest payment on december 31, 20x1. debit credit date xix c. journalize the amortization of the premium/discount on december 31, 20x1. (if necessary, round to the nearest dollar.) date debit credit xix d. on january 1, 20x2, the bonds are called at 99. journalize this transaction. debit credit date xix
PROBLEM 3: EXERCISES 1. On January 1, 20x1, Sixty Hours Co. issued 1,000, P2,000, 10% bonds for P1,903,927. Principal is due on December 31, 20x3. while interest is due annually every year-end. The effective interest rate is 12%. Requirement: Provide the journal entries over the life of the bonds.
Part 1 On April 1, 2020, Shelter Bay Inc. has available for issue S00,000 bonds due in four years. Interest at the rate of 10% is to be paid quarterty. Calculate the issue price if the market interest rate is a IIS b. 10% C9% Part 2 On October 1, Shelter Bay Inc. has available for issue a $326.000 bond due in eight years Interest at the rate of 125 is to be paid semiannually. Calculate the issue price if the market interest rate is a. IL.SON b. 12.00%
eferences Knowledge Check 01 On January 1, Year 1, Greenfield, Incorporated issues $100,000 of 9% bonds maturing in 10 years when the market rate of interest is 8%. Interest is paid semiannually on June 30 and December 31. When using a financial calculator to compute the issue price of the bonds, the applicable periodic interest rate ("I") is:
a. On January 1, 20X1, your firm issues a $15,000, 4-year, 5% bond with interest payable annually for $13,056. At the time of the issuance, market rates are 9%. Journalize the issuance of the bond. DATE Debit Credit XIX b. Journalize the first annual interest payment on December 31, 20X1. DATE Debit Credit XIX c. Journalize the amortization of the premium/discount on December 31, 20X1. (If necessary, round to the nearest dollar.) DATE Debit Credit XIX d. On January 1, 20X2, the bonds are called at 99. Journalize this transaction. DATE Debit Credit XIX

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