FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- How to calculate the issue price of the bonds with normal calculator?arrow_forwardOn June 30, 2021, Highland Co. issued $600,000, 8% bonds, due to mature on June 30, 2026. Interest is paid semi-annually on December 31 and June 30. Similar bonds at the time of sale were being traded at a market rate of 7%. Required: Calculate the value of the bond at the time of issuance, and record the initial journal entry. Assuming that Highland has a June 30 year end, provide any additional required entries (other than in part a) until June 30, 2022.arrow_forwardMarigold Corp. issued 3, 300 7%, 5-year, $1,000 bonds dated January 1, 2022, at face value. interest is paid each january 1. Prepare the journal entry to record the sale of these bonds on January 1, 2022.arrow_forward
- On September 30, 2024, the Techno Corporation issued 8% stated rate bonds with a face amount of $200 million. The bonds mature on September 30, 2044 (20 years). The market rate of interest for similar bonds was 10%. Interest is paid semiannually on March 31 and September 30. Required: Determine the price of the bonds on September 30, 2024. Note: Use tables, Excel, or a financial calculator. Round your final answers to nearest whole dollar amount, not in millions. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Time values are based on: n= i= Cash Flow Interest Principal Price of bonds S S Amount 40 5% 8,000,000 200,000,000 Present Valuearrow_forward1. Santos SA issues $300,000 in bonds dated January 1, 2022, due in five years with 9 percent interest payable annually on January 1. At the time of issue, the market rate for such bonds is 9percent.a) Illustrate the bond in line as principal invested and interest rate.b) Check the value of bound is it sold at par value.c) Register accounting transactions on journal entries.arrow_forwardWhen Patey Pontoons issued 10% bonds on January 1, 2024, with a face amount of $880,000, the market yield for bonds of similar risk and maturity was 11%. The bonds mature December 31, 2027 (4 years). Interest is paid semiannually on June 30 and December 31. Required: 1. Determine the price of the bonds at January 1, 2024. 2. Prepare the journal entry to record their issuance by Patey on January 1, 2024. 3. Prepare an amortization schedule that determines interest at the effective rate each period. 4. Prepare the journal entry to record interest on June 30, 2024. 5. What is the amount related to the bonds that Patey will report in its balance sheet at December 31, 2024? 6. What is the amount related to the bonds that Patey will report in its income statement for the year ended December 31, 2024? (Ignore income taxes.) 7. Prepare the appropriate journal entries at maturity on December 31, 2027 Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1.…arrow_forward
- On June 30, 2020, the market interest rate is 2.4%. Colwood Enterprises issues $500,000 of 3.4%, 16-year bonds at 110.625. The bonds pay interest on June 30 and December 31. Colwood amortizes bonds by the effective-interest method. Requirements 1. Prepare a bond amortization table for the first four semi-annual interest periods. 2. Record issuance of the bonds on June 30, 2020, the payment of interest at December 31, 2020, and the semi-annual interest payment on June 30, 2021. Requirement 1. Prepare a bond amortization table for the first four semi-annual interest periods. (Round your answers to the nearest whole dollar.) A B Colwood Enterprises Amortization Table C D Interest Expense Interest Payment (1.2% of Preceding Premium Semi-Annual (1.7% of Maturity Value) Bond Carrying Amount) (A-B) Premium (D-C) Amortization Account Balance Amount ($500,000+ E Bond Carrying D) Interest Date June 30, 2020 Dec. 31, 2020 June 30, 2021 Dec. 31, 2021 June 30, 2022arrow_forwardOn January 1, 2023, ABC Company issued $60,000,000 of 20-year, 9.5% bonds when the market rate of interest was 10.25%. Interest is paid semi-annually on June 30 and December 31. Required: Using Excel compute the price at which the bond was issued. Using Excel and the effective interest method of bond amortization prepare an amortization table for the entire life of the bond issue. You are expected to do all calculations in Excel (What are the excel Formulas) Prepare ALL journal entries for the following dates: January 1, 2023, June 30, 2023, December 31, 2023, and December 31, 2042arrow_forward(b) Prepare an effective-interest amortization table for the first eight interest payments for these bonds. (c) The Bonds were redeemed on January 1, 2026 (after the interest had been paid and recorded) at 102. Prepare the journal entry for the redemption of the bonds.arrow_forward
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