Homework Answers
Question No 8
Answer is credit premium on bond payable $34978
Journal entry
Question No 9
Answer is debit Discount on bond payable $34978
Journal entry
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on July 1, 2016, Illini Company sold three-year $1 million 12% bonds for $1,024,978 to yield...
on August 1,2016. Illini Company sold three-year $1 million 12% bonds for $1.01 million. The interests...
on August 1,2016. Illini Company sold three-year $1 million 12% bonds for $1.01 million. The interests are payable semiannually on June 30 and December 31. Please answer the following question (base your calculation on the number of months). I. point How much is the investor's interest payment out of the $1.01 million selling price of the bonds? A. $120,000 . $60,000 C.$30,000 D. $10,000 On August 1, 2016, Illini Company sold three-year $2 million 12% bonds for $2.02 million. The...
On July 1, 2016, Salem Corporation issued $3.3 million of 8% bonds payable in 10 years....
On July 1, 2016, Salem Corporation issued $3.3 million of 8% bonds payable in 10 years. The bonds pay interest semiannually. The bonds include detachable warrants giving the bondholder the right to purchase for $33, one share of $1 par value common stock at any time during the next 10 years. Salem sold the bonds for $3.3 million. The value of the warrants at the time of issuance was $132,000. Required: Prepare in general journal format the entry to record...
On January 1, a company issues bonds dated January 1 with a par value of $210,000....
On January 1, a company issues bonds dated January 1 with a par value of $210,000. The bonds mature in 5 years. The contract rate is 11%, and interest is paid semiannually on June 30 and December 31. The market rate is 10% and the bonds are sold for $218,105. The journal entry to record the issuance of the bond is: Multiple Choice O Debit Cash $218,105; credit Premium on Bonds Payable $8,105, credit Bonds Pable $210,000 Debit Cash $218,105,...
Lance Brothers Enterprises acquired $590,000 of 2% bonds, dated July 1, on July 1, 2016, as...
Lance Brothers Enterprises acquired $590,000 of 2% bonds, dated July 1, on July 1, 2016, as a long-term investment. Management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 3% for bonds of similar risk and maturity. Lance Brothers paid $510,000 for the investment in bonds and will receive interest semiannually on June 30 and December 31 Prepare the journal entries (a) to record Lance Brothers' investment in the bonds on...
On January 1 of this year, Victor Corporation sold bonds with a face value of $1,450,000 and a coupon rate of/ percent....
On January 1 of this year, Victor Corporation sold bonds with a face value of $1,450,000 and a coupon rate of/ percent. The bonds mature in four years and pay interest semiannually every June 30 and December 31. Victor uses the straight-line amortization method and also uses a premium account. Assume an annual market rate of interest of 6 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables...
On January 1, a company issues bonds dated January 1 with a par value of $300,000. The bonds mature in 5 years. Th...
On January 1, a company issues bonds dated January 1 with a par value of $300,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 10% and the bonds are sold for $288.413. The journal entry to record the first interest payment using the effective interest method of amortization is: Multiple Choice Debit interest Payable $13.500 cred Cash $13,500 O Debit interest Expense...
On January 1, a company issues bonds dated January 1 with a par value of $220,000....
On January 1, a company issues bonds dated January 1 with a par value of $220,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $228,930. The journal entry to record the issuance of the bond is: Multiple Choice C Debit Cash $228,930; credit Bonds Payable $228,930 Debit Cash $228,930; credit Premium on Bonds Payable $8,930...
On January 1 of this year, Victor Corporation sold bonds with a face value of $1,510,000...
On January 1 of this year, Victor Corporation sold bonds with a face value of $1,510,000 and a coupon rate of 9 percent. The bonds mature in four years and pay interest semiannually every June 30 and December 31. Victor uses the straight-line amortization method and also uses a premium account. Assume an annual market rate of interest of 6 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the...
On January 1, 2020, Sheridan Company sold 12% bonds having a maturity value of $550,000 for...
On January 1, 2020, Sheridan Company sold 12% bonds having a maturity value of $550,000 for $637,838, which provides the bondholders with a 8% yield. The bonds are dated January 1, 2020, and mature January 1, 2025, with interest payable December 31 of each year. Sheridan Company allocates interest and unamortized discount or premium on the effective interest basis. (a) Prepare the journal entry at the date of the bond issuance. (Round answer to 0 decimal places, e.g. 38,548. If...
Mills Corporation acquired as a long-term investment $260 million of 6% bonds, dated July 1, on...
Mills Corporation acquired as a long-term investment $260
million of 6% bonds, dated July 1, on July 1, 2021. Company
management has the positive intent and ability to hold the bonds
until maturity. The market interest rate (yield) was 4% for bonds
of similar risk and maturity. Mills paid $300.0 million for the
bonds. The company will receive interest semiannually on June 30
and December 31. As a result of changing market conditions, the
fair value of the bonds at...
on August 1,2016. Illini Company sold three-year $1 million 12% bonds for $1.01 million. The interests are payable semiannually on June 30 and December 31. Please answer the following question (base your calculation on the number of months). I. point How much is the investor's interest payment out of the $1.01 million selling price of the bonds? A. $120,000 . $60,000 C.$30,000 D. $10,000 On August 1, 2016, Illini Company sold three-year $2 million 12% bonds for $2.02 million. The...
On January 1, a company issues bonds dated January 1 with a par value of $210,000. The bonds mature in 5 years. The contract rate is 11%, and interest is paid semiannually on June 30 and December 31. The market rate is 10% and the bonds are sold for $218,105. The journal entry to record the issuance of the bond is: Multiple Choice O Debit Cash $218,105; credit Premium on Bonds Payable $8,105, credit Bonds Pable $210,000 Debit Cash $218,105,...
Lance Brothers Enterprises acquired $590,000 of 2% bonds, dated July 1, on July 1, 2016, as a long-term investment. Management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 3% for bonds of similar risk and maturity. Lance Brothers paid $510,000 for the investment in bonds and will receive interest semiannually on June 30 and December 31 Prepare the journal entries (a) to record Lance Brothers' investment in the bonds on...
On January 1 of this year, Victor Corporation sold bonds with a face value of $1,450,000 and a coupon rate of/ percent. The bonds mature in four years and pay interest semiannually every June 30 and December 31. Victor uses the straight-line amortization method and also uses a premium account. Assume an annual market rate of interest of 6 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables...
On January 1, a company issues bonds dated January 1 with a par value of $300,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 10% and the bonds are sold for $288.413. The journal entry to record the first interest payment using the effective interest method of amortization is: Multiple Choice Debit interest Payable $13.500 cred Cash $13,500 O Debit interest Expense...
On January 1, a company issues bonds dated January 1 with a par value of $220,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $228,930. The journal entry to record the issuance of the bond is: Multiple Choice C Debit Cash $228,930; credit Bonds Payable $228,930 Debit Cash $228,930; credit Premium on Bonds Payable $8,930...
On January 1 of this year, Victor Corporation sold bonds with a face value of $1,510,000 and a coupon rate of 9 percent. The bonds mature in four years and pay interest semiannually every June 30 and December 31. Victor uses the straight-line amortization method and also uses a premium account. Assume an annual market rate of interest of 6 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the...
On January 1, 2020, Sheridan Company sold 12% bonds having a maturity value of $550,000 for $637,838, which provides the bondholders with a 8% yield. The bonds are dated January 1, 2020, and mature January 1, 2025, with interest payable December 31 of each year. Sheridan Company allocates interest and unamortized discount or premium on the effective interest basis. (a) Prepare the journal entry at the date of the bond issuance. (Round answer to 0 decimal places, e.g. 38,548. If...
Mills Corporation acquired as a long-term investment $260
million of 6% bonds, dated July 1, on July 1, 2021. Company
management has the positive intent and ability to hold the bonds
until maturity. The market interest rate (yield) was 4% for bonds
of similar risk and maturity. Mills paid $300.0 million for the
bonds. The company will receive interest semiannually on June 30
and December 31. As a result of changing market conditions, the
fair value of the bonds at...
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