Salt Foods purchases forty $1,000, 7%, 10-year bonds issued by Pretzelmania, Inc., for $42,975 on January 1. The market interest rate for bonds of similar risk and maturity is 6%. Salt Foods receives interest semiannually on June 30 and December 31.   1. & 2. Record the necessary entries regarding the bonds.

Q: On July 1, Year 1, Khatri Industries Inc. issued $18,000,000 of 10-year, 5% bonds at a market…

A: Coupon rate = 5%/2 Coupon rate = 2.5%   Market rate = 6%/2 Market rate = 3%   Number of periods =…

Q: On the first day of the fiscal year, a company issues an $555,000, 8%, 5-year bond that pays…

A: Discount on bonds = Face value of the bonds - Issue price = $555,000 - $521,700 = $28,300

Q: On January 1, 20XX, Cisco Corporation issued a $600,000, 9%, 5-year bond for $576,834. The bonds…

A: Bond's discount or premium is caused due to difference between market rate and couporate.

Q: On the first day of the fiscal year, a company issues a $500,000, 8%, 10-year bond that pays…

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

Q: On the first day of the fiscal year, a company issues a $3,600,000, 9%, 4-year bond that pays…

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

Q: On January 1, a company issued and sold a $393,000, 6%, 10-year bond payable, and received proceeds…

A: Introduction: When company issues bonds at discount, then the discount amount can be amortized over…

Q: On January 1, Year 1, Hanover Corporation issued bonds with a $56,500 face value, a stated rate of…

A: Bonds Payable: Bonds Payable is an long term debt issued by the government and company's to raised…

Q: On September 1, Year 1, Parsons Company purchased $84, 000 of 10-year, 7% government bonds at 100…

A: The objective of the question is to journalize the purchase, receipt of interest, and sale of…

Q: On June 30, Jameson Company issued $2,500,000 of 10-year, 8% bonds, dated June 30, for $2,580,000.…

A: A BOND IS A DEBT SECURITY UNDER WHICH THE BOND ISSUER OWES THE BOND HOLDER A DEBT INCLUDING INTEREST…

Q: On January 1, Year 1, Parker Company issued bonds with a face value of $65,000, a stated rate of…

A: Bond is a financial instrument which is issued by the large organization to raise the funds. Bonds…

Q: On January 1, Year 1, Victor Company issued bonds with a $875,000 face value, a stated rate of…

A: Lets understand the basics. When bond is issued at less than the face value of bond then bond is…

Q: terest expense shown on Jones' income statement for the year ending December 31, Year 1?

A: When bonds are issued at a discount , the total interest expense is the cash interest expense plus…

Q: Metlock, Inc. issued $282,000, 7%, 15-year bonds on December 31, 2021, for $253,800. Interest is…

A: Total discount on bonds = Face value of bonds - issue value of bonds = 282000-253800 = $28,200

Q: On Jan. 1, Year 1, Foxcroft Inc. issued 100 bonds with a face value of $910 for $94,800. The bonds…

A: Bonds payable (at par) = 100 bonds * $910= $ 91000 Bond issued value= $ 94800 Premium on bond issue=…

Q: On the first day of the fiscal year, a company issues an $302,000, 8%, 5-year bond that pays…

A: Under the straight line method of amortization, premium or discount of bond need to amortize equally…

Q: Journalize the entry to record the issuance of the bonds.

A: Journal entry:   It is a systematic record of a financial transaction of an organization recorded in…

Q: Rekya Mart Inc. is a general merchandise retail company that began operations on January 1, 20Y5.…

A: A journal entry is a form of accounting entry that is used to report a business transaction in a…

Q: On January 1, the first day of the fiscal year, a company issues a $2,400,000, 4%, five-year bond…

A: Annual Interest=2,400,000×4%=96,000

Q: Hoover Corp., a wholesaler of music equipment, issued $32,700,000 of 20-year, 6% callable bonds on…

A: Interest expense = Face value of bonds x rate of interest x no. of month/12 = $32,700,000 x 6% x…

Q: On 1 April, year 1, Happy Corporation issues $50 million of 10%, 30-year bonds payable at par.…

A: Journal entry to record first cash payment to bondholders:

Q: On January 1, Year 1, Wayne Company issued bonds with a face value of $635,000, a 5% stated rate of…

A: Income statement is prepared with a view to ascertain the earnings of an entity over a specific…

Q: On January 1, the first day of the fiscal year, a company issues an $1,350,000, 11%, five-year bond…

A: The process of recording business transactions in the books of accounts for the first time is…

Q: Hillside issues $4,000,000 of 6%, 15-year bonds dated January 1, 2019, that pay interest…

A: The question is based on the concept of the issue of securities. As per Bartleby guidelines we are…

Q: Salt Foods purchases forty $1,000, 7%, 10-year bonds issued by Pretzelmania, Inc., for $40,000 on…

A: Interest received = Face value of Investment x rate of interest x no. of months /12 =…

Q: Prepare Garzon Company's journal entries to record the following transactions for the current year.…

A: A journal entry records a business transaction in the accounting system for an organization.

Q: On January 1, the first day of the fiscal year, Designer Fabric Co. issues a $400,000, 5%, 10-year…

A: Bond is financial instruments used to raise funds to meet financial obligations of business.Bond can…

Q: On the first day of the fiscal year, a company issues an $2,250,000, 12%, five-year bond that pays…

A: Premium on issue of bonds = Cash received - Par value of bonds = $2,379,360 - $2,250,000 = $129,360

Q: On January 1, Year 1, Hanover Corporation issued bonds with a $46,500 face value, a stated rate of…

A: Straight line method  amortization= Premium or discount/ number of period bond is outstanding.…

Q: On the first day of the fiscal year, a company issues a $3,300,000, 12%, 6-year bond that pays…

A: The bonds payable are the financial instruments that are used to raise money from the market or…

Q: Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley…

A: Solution to a. & b. are as follows:

Q: On the first day of the fiscal year, a company issues a (n) $935,000, 7%, 5-year bond that pays…

A: The objective of the question is to journalize the entry for the first interest payment and the…

Q: On the first day of the fiscal year, a company issues a $3,000,000, 11%, five-year bond that pays…

A: Bonds: Bonds are financial debt instruments issued by the corporations to raise for the purposes of…

Q: ay of the fiscal year, a company issues an $800,000, 6%, 5-year bond that pays semiannual interest…

A: Solution: Semiannual interest amount = $800,000*6%*6/12 = $24,000 Discount amortization = ($800,000…

Q: On the first day of the fiscal year, a company issues a $1,450,000, 5%, five-year bond that pays…

A: Discount on Bonds Payable = Face value of the bonds - Issue value of the bonds = $1,450,000 -…

Q: On Jan. 1, Year 1, Foxcroft Inc. issued 100 bonds with a face value of $1,000 each for $104,000. The…

A: Journal entries are passed following the golden rules of accounting  Debit all assets and expenses…

Q: Hillside issues $1,900,000 of 5%, 15-year bonds dated January 1, 2019, that pay interest…

A: Face value of bond = $ 1,900,000                             Issue price of bond = $ 1,641,812…

Q: On July 1, a company issues a $1,000,000, 7%, five-year bond that pays semiannual interest of…

A: The discount on issue of bond is amortized over the life of the bond When the same amount of bond…

Q: On January 1, Year 1, Bell Corporation issued $203,000 of 10-year, 6 percent bonds at their face…

A: Introduction:- A journal entry is the act of recording or keeping track of any financial or…

Q: On January 1, Year 1, Hanover Corporation issued bonds with a $57,750 face value, a stated rate of…

A: Interest expense is the amount which is incurred on the amount used by the entity. Interest expense…

Q: Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, Year 1, Smiley…

A: a. Prepare the journal entry to record the issuance of bonds on April 1.

Q: On the first day of the fiscal year, a company issues a $8,800,000, 11%, 7-year bond that pays…

A: Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various…

Q: On January 1, Year 1, Hackman Corporation issued $600,000 face value 6% bonds dated January 1, Year…

A: The objective of the question is to record the issuance of the bonds and the first two interest…

Q: On January 1, the first day of the fiscal year, Designer Fabric Inc. issues a $850,000, 8%, 10-year…

A: Journal is the book of original entry in which all the financial transactions of the business are…