Twixt Corp. issued $5,010,000 of convertible bonds on 1 January for $4,800,000 cash. The bond had the following terms: Bonds mature in five years' time. Annual interest, 6%, is paid each 31 December.Bonds are convertible to 501,000 common shares at maturity or can be repaid in cash. This choice is up to Twixt Corp. Current market interest rates are 7%. Required: 1. Assign a value to the liability andthe equity portions of the bond. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) 2. Provide the journal entry to record issuance of the bond. (If noentry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) 3.Provide a schedule to show interest expense and amortization of the liability over the life of the bond. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.Leave no cell blank. Be certain to enter "0" wherever required.) 4. This part of the question is not part of your Connect assignment.

The liability portion represents the present value of future cash flows associated with the bond's…

Answered: Twixt Corp. issued $5,010,000 of…

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

ChapterMB: Model-building Problems

Section: Chapter Questions

Problem 13M

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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
Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market rate of 4%. The bonds paid interest semi-annually on June 30 and Dec. 31. How much money did the company receive when the bonds were issued? The bonds would be quoted at what rate?
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
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On Jan. 1, Year 1, Foxcroft Inc. issued 100 bonds with a face value of $1,000 for $104,000. The bonds had a stated rate of 6% and paid interest semi-annually. What is the journal entry to record the first payment to the bondholders?
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Pinetop Corporation issued $150,000 10-year bonds at par. The bonds have a stated rate of 6% and pay interest annually. What is the journal entry to record the sale of the bonds?
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