Homework Help Question & Answers

On January 1, Elias Corporation issued 6% bonds with a face value of $94,000. The bonds...

On January 1, Elias Corporation issued 6% bonds with a face value of $94,000. The bonds are sold for $91,180. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, 10 years from now. Elias records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31 of the first year is a. $470 b. $2,820 c. $5,640 d. $5,922

Bonds Payable has a balance of $946,000 and Premium on Bonds Payable has a balance of $10,406. If the issuing corporation redeems the bonds at 103, what is the amount of gain or loss on redemption?

a.$17,974 loss

b.$10,406 gain

c.$10,406 loss

d.$974,380 gain

On the first day of the fiscal year, a company issues an $689,000, 9%, five-year bond that pays semiannual interest of $31,005 ($689,000 x 9% x 1/2), receiving cash of $647,700. Journalize the entry to record the first interest payment and the amortization of the related bond discount using the straight-line method.

If an amount box does not require an entry, leave it blank.

0 0
Add a comment
Answer #1

1. Calculation of bond interest expense:

​Interest expense=$94000*6%=$5640

Amortization expense=($94000-$91180)/10=$282

Total interest expense=$5922

Correct option is D.

* First question has been answered as per Chegg's policy.

Add a comment
Know the answer?
Add Answer to:
On January 1, Elias Corporation issued 6% bonds with a face value of $94,000. The bonds...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coin

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • On January 1, Elias Corporation issued 9% bonds with a face value of $63,000. The bonds...

    On January 1, Elias Corporation issued 9% bonds with a face value of $63,000. The bonds are sold for $61,110. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, 10 years from now. Elias records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31 of the first year is

  • Calculator On January 1, Elias Corporation issued 12 % bonds with a face value of $52,000....

    Calculator On January 1, Elias Corporation issued 12 % bonds with a face value of $52,000. The bonds are sold for $50,440. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, 10 years from now. Elias records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31 of the first year is a. $6,396 Ob. $1,560 Oc. $6,240 Od. $520

  • please help On January 1, Elias Corporation issued 10% bonds with a face value of $62,000....

    please help On January 1, Elias Corporation issued 10% bonds with a face value of $62,000. The bonds are sold for $60,140. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, 10 years from now. Elias records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31 of the first year is a. $6,200 b. $ 6,386 c. $517 d. $1,860

  • On January 1 of the current year, Barton Corporation issued 6% bonds with a face value...

    On January 1 of the current year, Barton Corporation issued 6% bonds with a face value of $87,000. The bonds are sold for $82,650. The bonds pay interest semiannually on June 30 and December 31, and the maturity date is December 31, five years from now. Barton records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31 is Oa. $435 Ob. $6,525 Oc. $2,610 Od. $6,090

  • On January 1 of the current year, Barton Corporation issued 8% bonds with a face value...

    On January 1 of the current year, Barton Corporation issued 8% bonds with a face value of $103,000. The bonds are sold for $97,850. The bonds pay interest semiannually on June 30 and December 31, and the maturity date is December 31, five years from now. Barton records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31 is a.$9,785 b.$515 c.$9,270 d.$4,120

  • 1. Merchant Company issued 10-year bonds on January 1. The 7% bonds have a face value...

    1. Merchant Company issued 10-year bonds on January 1. The 7% bonds have a face value of $709,000 and pay interest every January 1 and July 1. The bonds were sold for $589,257 based on the market interest rate of 8%. Merchant uses the effective interest method to amortize bond discounts and premiums. On July 1 of the first year, Merchant should record interest expense (round to the nearest dollar) of a.$23,570 b.$20,624 c.$28,360 d.$24,815 2. Franklin Corporation issues $94,000,...

  • On January 1 of the current year, the Queen Corporation issued 12% bonds with a face...

    On January 1 of the current year, the Queen Corporation issued 12% bonds with a face value of $57,000. The bonds are sold for $55,290. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, five years from now. Queen records straight-line amortization of the bond discount. Determine the bond interest expense for the year ended December 31. Select the correct answer. $7,182 $570 $6,840 $1,710

  • 5 % On January 1, 2017, Lock Corporation issued $1,800,000 face value, 1 10 -year bonds...

    5 % On January 1, 2017, Lock Corporation issued $1,800,000 face value, 1 10 -year bonds at $1,667,518 This price resulted in an effective-interest rate of 6% on the bonds. Lock uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest January 1. Instructions: (Round all computations to the nearest dollar.) (a) Prepare the journal entry to record the issuance of the bonds on January 1, 2017. 01/01/14 Account title Account title Account title Amount...

  • On January 1, 2020, Oriole Corporation issued $1,550,000 face value, 6%, 10-year bonds at $1,441,134. This...

    On January 1, 2020, Oriole Corporation issued $1,550,000 face value, 6%, 10-year bonds at $1,441,134. This price resulted in an effective-interest rate of 7% on the bonds. Lock uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest on January 1. Prepare the journal entry to record the issuance of the bonds on January 1, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation...

  • On January 1, 2018, Irik Corporation issued $2,550,000 face value, 7%, 10-year bonds at $2.378,893. This...

    On January 1, 2018, Irik Corporation issued $2,550,000 face value, 7%, 10-year bonds at $2.378,893. This price resulted in an effective- interest rate of 8% on the bonds. The bonds pay annual interest, each January 1. Prepare the journal entry to record the issue of the bonds on January 1, 2018. (Credit account titles are automatically Indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Jan. 1, 2018 Prepare an amortization table through...

Free Homework App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.