Stanford issues bonds dated January 1, 2021, with a par value of $244,000. The bonds' annual contract rate is 10%, and interest is paidsemiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 12%,and the bonds are sold for $232,011.1. What is the amount of the discount on these bonds at issuance?2. How much total bond interest expense will be recognized over the life of these bonds?3. Prepare an effective interest amortization table for these bonds.Complete this question by entering your answers in the tabs below.Required 1 Required 2 Required 3Prepare an effective interest amortization table for these bonds.Note: Round all amounts to the nearest whole dollar.SemiannualInterestPeriod-End01/01/202106/30/202112/31/202106/30/202212/31/202206/30/202312/31/2023TotalCash Interest Bond InterestPaidExpenseDiscountAmortizationUnamortizedDiscountCarrying Value Stanford issues bonds dated January 1, 2021, with a par value of $244,000. The bonds' annual contract rate is 10%, and interest is paidsemiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 12%,and the bonds are sold for $232,011.1. What is the amount of the discount on these bonds at issuance?2. How much total bond interest expense will be recognized over the life of these bonds?3. Prepare an effective interest amortization table for these bonds.Complete this question by entering your answers in the tabs below.Required 1 Required 2 Required 3How much total bond interest expense will be recognized over the life of these bonds?Total Bond Interest Expense Over Life of Bonds:Amount repaid:payments ofPar value at maturityTotal repaidLess amountTotal bond interest expense

Stanford issues bonds dated January 1, 2021, with a par value of $244,000. The bonds' annual contract rate is 10%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 12%, and the bonds are sold for $232,011. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over the life of these bonds? 3. Prepare an effective interest amortization table for these bonds. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3

Stanford issues bonds dated January 1, 2021, with a par value of $244,000. The bonds' annual contract rate is 10%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 12%, and the bonds are sold for $232,011. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over the life of these bonds? 3. Prepare an effective interest amortization table for these bonds. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3

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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On January 1, 2021, a firm issues bonds with a face amount of $1,500,000. The stated rate is 10%, the market rate is 12%, the term is three years and payments are made twice a year, on June 30 and Dec. 31. What is the present value of the bond that the firm records on its books on the issue date? What is the interest expense that the firm records on its books when making the first cash payment to investors on June 30, 2021?
Crane Company issues $26400000, 8.0%, 5-year bonds dated January 1, 2024 on January 1, 2024. The bonds pay interest semiannually on June 30 and December 31. The bonds are issued to yield 7.0%. Given the following present value factors, what are the proceeds from the bond issue? Present value of a single sum for 5 periods Present value of a single sum for 10 periods Present value of an annuity for 5 periods Present value of an annuity for 10 periods $27487261 $26400000 $27446108 O $27497828 3.5% 0.84197 4.0% 4.51505 0.82193 0.70892 0.67556 4.45182 8.31661 8.11090 7.0% 0.71299 0.50835 4.10020 7.02358 8.0% 0.68058 0.46319 3.99271 6.71008
On December 31, 2020, Paulson company issues a 4-year bond with a par value of $100,000, a contract rate of 8% annually and semiannual interest payments. At time of issues, prevailing interest rates for bonds of similar credit quality and maturity are 10%. 1. Calculate the price of the bond are issued at and record the journal entry to record the bond issuance. (show your calculations) 2. Prepare the journal entry for the first interest payment on the bond.
1. On January 1, 2024, Lansing Group issued $1,000,000 of 6% bonds, dated January 1. Interest is payable semiannually on June 30 and December 31. The bonds mature in five years. The market yield for bonds of similar risk and maturity is 8%. INSTRUCTIONS: 1. Determine the price of these bonds that are issued to yield the 8% market rate using the Time Value of Money Tables. Include the table and relevant components for each factor used. 2. Record the issuance of these bonds by Lansing Group. 3. Prepare an amortization schedule that determines interest at the effective rate through the maturity date of the bonds. 4. Prepare the entries to record the interest on June 30, 2024, and December 31, 2024. 5. Assume that Lansing Group retires the bonds on January 1, 2026, paying $1,027,544. Prepare the entry to record the retirement.
Happy Hollow, LLC issues $50,000 bonds at 20% interest with quarterly interest payments. Bonds have a maturity date in 5 years. At the time of issue, the market rate is 16%. а. Calculate the issue price of the bond b. How much total interest does the bondholder receive over the life of the bond?
On June 30, 2021, Allen Corporation issued $4 million of its 8% bonds for $3.5 million. The bonds were priced to yield 9.4%. The bonds are dated June 30, 2021. Interest is payable semiannually on December 31 and July 1. If the effective interest method is used, by how much should the bond discount be reduced for the six months ended December 31, 2021? A. $4,800. B. $4,500. C. $3,500. D. $9,000.
Ellis Company issues 6.5%, five-year bonds dated January 1, 2021, with a $250,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $255,333. The annual market rate is 6% on the issue date. Required: 1. Compute the total bond interest expense over the bonds' life. 2. Prepare an effective interest amortization table for the bonds' life. 3. Prepare the journal entries to record the first two interest payments.
Stanford issues bonds dated January 1, 2021, with a par value of $253,000. The bonds' annual contract rate is 6%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 8%, and the bonds are sold for $239,733. 1. What is the amount of the discount on these bonds at issuance?2. How much total bond interest expense will be recognized over the life of these bonds?3. Prepare an effective interest amortization table for these bonds.
Quatro Company issues bonds dated January 1, 2021, with a par value of $760,000. The bonds' annual contract rate is 10%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 8 %, and the bonds are sold for $799, 828. What is the amount of the premium on these bonds at issuance? How much total bond interest expense will be recognized over the life of these bonds? Prepare an effective interest amortization table for these bonds
Mindsetta Music Inc. issued bonds on March 1, 2020, with a par value of $420,000. The bonds mature in 15 years and pay 14.00% annual interest in two semiannual payments. On the issue date, the annual market rate of interest for the bonds turned out to be 16%. (Table attached for reference) 1. What is the semiannual interest payment for these bonds? 2. How many semiannual interest payments will be made on these bonds over their life? 3. Are the bonds issued at discount, premium, or par? 4. Estimate the market value of the binds as the date they were issued 5. Journal entry: Record the sales of bonds at discount on the original issue date
Quatro Company issues bonds dated January 1, 2021, with a par value of $880,000. The bonds' annual contract rate is 13%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 12%, and the bonds are sold for $901,670. What is the amount of the premium on these bonds at issuance? How much total bond interest expense will be recognized over the life of these bonds? Prepare a straight-line amortization table for these bonds.
Your Company issued a $150,000 face value bond on January 1, 2020. The 20 year term bond was issued at 102 and had a 4% stated rate of interest that is payable on December 31st of each year. What is the carrying value of the bond after the third interest payment is made? Carrying value = bond face + bond premium