(Amortization Schedule—Straight-Line) Devon Harris Company sells 10% bonds having a maturity value of $2,000,000 for $1,855,816....
(Amortization Schedule—Straight-Line) Devon Harris Company sells 10% bonds having a maturity value of $2,000,000 for $1,855,816. The bonds are dated January 1, 2020, and mature January 1, 2025. Interest is payable annually on January 1.
Instructions
Set up a schedule of interest expense and discount amortization under the straight-line method. (Round answers to the nearest cent.) prepare journal entries for the issuance of the bonds, 2 years of interest payments, and retirement at maturity.
Assume the same information,Using 12% effective (market) interest rate, prepare journal entries for issuance of the bonds, 2 years of interest payments, and retirement at maturity;
Homework Answers
| CALCULATION FOR 10% | |||
| DATE | PARTICLAR | DEBIT | CREDIT |
| 01.01.2020 | CASH / BANK A/C DR | 18,55,816.00 | |
| DISCOUNT ON AMORTIZATION A/C DR | 1,44,184.00 | ||
| TO 10% BONDS | 20,00,000.00 | ||
| BEING ISSUE BONDS) | |||
| 01.01.2021 | PROFIT AND LOSS A/C DR | 2,00,000.00 | |
| TO INTEREST ON BONDS | 2,00,000.00 | ||
| (BEING INTEREST DUE FOR THE YEAR 2020) | |||
| 01.01.2021 | INTEREST ON BONDS A/C DR. | 2,00,000.00 | |
| TO CASH/BANKS | 2,00,000.00 | ||
| (BEING INTEREST PAID) | |||
| 01.01.2022 | PROFIT AND LOSS A/C DR | 2,00,000.00 | |
| TO INTEREST ON BONDS | 2,00,000.00 | ||
| (BEING INTEREST DUE FOR THE YEAR 2021) | |||
| 01.01.2021 | INTEREST ON BONDS A/C DR. | 2,00,000.00 | |
| TO CASH/BANKS | 2,00,000.00 | ||
| (BEING INTEREST PAID) | |||
| 01.01.2025 | 10% BONDS | 20,00,000.00 | |
| TO CASH/BANKS | 20,00,000.00 | ||
| (BEING BONDS REDUMPTION ON MATURITY DATE) | |||
| CALCULATION OF INTEREST ON BONDS | |||
| YEAR | FACE VALUE | RATE OF INTEREST | AMOUNT |
| 1 | 2000000 | 10% | 200000 |
| 2 | 2000000 | 10% | 200000 |
| 3 | 2000000 | 10% | 200000 |
| 4 | 2000000 | 10% | 200000 |
| 5 | 2000000 | 10% | 200000 |
| CALCULATION OF AMORTIZATION EXPENSES ON ISSUE | |||
| YEAR | Expenses | Factor | AMOUNT |
| 1 | 1,44,184.00 | 1/5 | 28,836.80 |
| 2 | 1,44,184.00 | 1/5 | 28,836.80 |
| 3 | 1,44,184.00 | 1/5 | 28,836.80 |
| 4 | 1,44,184.00 | 1/5 | 28,836.80 |
| 5 | 1,44,184.00 | 1/5 | 28,836.80 |
| CALCULATION FOR 12% | |||
| DATE | PARTICLAR | DEBIT | CREDIT |
| 01.01.2020 | CASH / BANK A/C DR | 18,55,816.00 | |
| DISCOUNT ON AMORTIZATION A/C DR | 1,44,184.00 | ||
| TO 12% BONDS | 20,00,000.00 | ||
| BEING ISSUE BONDS) | |||
| 01.01.2021 | PROFIT AND LOSS A/C DR | 2,40,000.00 | |
| TO INTEREST ON BONDS | 2,40,000.00 | ||
| (BEING INTEREST DUE FOR THE YEAR 2020) | |||
| 01.01.2021 | INTEREST ON BONDS A/C DR. | 2,40,000.00 | |
| TO CASH/BANKS | 2,40,000.00 | ||
| (BEING INTEREST PAID) | |||
| 01.01.2022 | PROFIT AND LOSS A/C DR | 2,40,000.00 | |
| TO INTEREST ON BONDS | 2,40,000.00 | ||
| (BEING INTEREST DUE FOR THE YEAR 2021) | |||
| 01.01.2021 | INTEREST ON BONDS A/C DR. | 2,40,000.00 | |
| TO CASH/BANKS | 2,40,000.00 | ||
| (BEING INTEREST PAID) | |||
| 01.01.2025 | 12% BONDS | 20,00,000.00 | |
| TO CASH/BANKS | 20,00,000.00 | ||
| (BEING BONDS REDUMPTION ON MATURITY DATE) | |||
| CALCULATION OF INTEREST ON BONDS | |||
| YEAR | FACE VALUE | RATE OF INTEREST | AMOUNT |
| 1 | 2000000 | 12% | 240000 |
| 2 | 2000000 | 12% | 240000 |
| 3 | 2000000 | 12% | 240000 |
| 4 | 2000000 | 12% | 240000 |
| 5 | 2000000 | 12% | 240000 |
Add Answer to:
(Amortization Schedule—Straight-Line) Devon Harris Company sells
10% bonds having a maturity value of $2,000,000 for $1,855,816....
E14.6 (LO 1) (Amortization Schedule—Straight-Line) Devon Harris Company sells 10% bonds having a maturity value of...
E14.6 (LO 1) (Amortization Schedule—Straight-Line) Devon Harris Company sells 10% bonds having a maturity value of $2,000,000 for $1,855,816. The bonds are dated January 1, 2020, and mature January 1, 2025. Interest is payable annually on January 1. Instructions Set up a schedule of interest expense and discount amortization under the straight-line method. (Round answers to the nearest cent.)
(Amortization Schedule Straight-Line) Devon Harris Company sells 10% bonds having a maturity value o$2,000,000 for $1,855,816
E 14-6 L01) (Amortization Schedule Straight-Line) Devon Harris Company sells 10% bonds having a maturity value o$2,000,000 for $1,855,816. The bonds are dated January 1, 2017, and mature January 1, 2022. Interest is payable annually on January 1 Instructions Set up a schedule of interest expense and discount amortization under the straight-line method. (Round answers to the nearest cent.)E 14-7 L01) (Amortization Schedule-Effective-Interest) Assume the same information as E14-6.Instructions Set up a schedule of interest expense and discount amortization under the effective-interest method. (Hint:...
E14.7 (LO 1) (Amortization Schedule–Effective-Interest) Assume the same information as E14.6.
E14.7 need helpE14.6 (LO 1) (Amortization Schedule-Straight-Line) Devon Harris Company sells 10% bonds having a maturity value of $2,000,000 for $1,855,816. The bonds are dated January 1, 2020, and mature January 1, 2025. Interest is payable annually on January 1. Instructions Set up a schedule of interest expense and discount amortization under the straight-line method. (Round answers to the nearest cent.) E14.7 (LO 1) (Amortization Schedule–Effective-Interest) Assume the same information as E14.6.
Kindly show every step please. Thank you! 1. Devon Harris Company sells 10% bonds having a...
Kindly show every step please. Thank you! 1. Devon Harris Company sells 10% bonds having a maturity value of $2,000,000. The market rate is 12% on the bonds. The bonds are dated January 1, 2017, and mature January 1, 2022. Interest is payable annually on January 1. Bond issue cost is $10,000. Set up the amortization schedule and complete all required journal entries for 2017 and 2018. 2. On Jan 1, 2017, Henderson Corp retired $500,000 of bonds at 99....
Metlock Company sells 10% bonds having a maturity value of $1,410,000 for $1,308,350. The bonds are...
Metlock Company sells 10% bonds having a maturity value of $1,410,000 for $1,308,350. The bonds are dated January 1, 2020, and mature January 1, 2025. Interest is payable annually on January 1. Set up a schedule of interest expense and discount amortization under the straight-line method. (Round answers to 0 decimal places, e.g. 38,548.)
Crane Company sells 9% bonds having a maturity value of $2,040,000 for $1,819,395. The bonds are...
Crane Company sells 9% bonds having a maturity value of $2,040,000 for $1,819,395. The bonds are dated January 1, 2020, and mature January 1, 2025. Interest is payable annually on January 1. Set up a schedule of interest expense and discount amortization under the straight-line method.
Pearl Company sells 8% bonds having a maturity value of $2,000,000 for $1,848,366. The bonds are...
Pearl Company sells 8% bonds having a maturity value of $2,000,000 for $1,848,366. The bonds are dated January 1, 2020, and mature January 1, 2025. Interest is payable annually on January 1. ✓ Your answer is correct. Determine the effective-interest rate. (Round answer to 0 decimal places, e.g. 18%.) The effective-interest rate e Textbook and Media Your answer is partially correct. Set up a schedule of interest expense and discount amortization under the effective interest method. (Round intermediate calculations to...
Novak Company sells 10% bonds having a maturity value of $2,100.000 for $1.948.607. The bonds are...
Novak Company sells 10% bonds having a maturity value of $2,100.000 for $1.948.607. The bonds are dated January 1, 2017, and mature January 1, 2022. Interest is pay able annually on January 1 Set up a schedule of interest expense and discount amortization under the straight line method. (Round answers to decimal places a 38.548.) Schedule of Discount Amortization Straight-Line Method Interest Discount Amortized Year Paid Carrying Amount of Bonds Jan 1, 2017 Jan. 1. 2018 Jan 1, 2019 Jan....
Riverbed Company sells 10% bonds having a maturity value of $2,550,000 for $2,366,166. The bonds are...
Riverbed Company sells 10% bonds having a maturity value of
$2,550,000 for $2,366,166. The bonds are dated January 1, 2017, and
mature January 1, 2022. Interest is payable annually on January
1.
Set up a schedule of interest expense and discount amortization
under the straight-line method. (Round answers to 0
decimal places, e.g. 38,548.)
Schedule of Discount Amortization
Straight-Line Method
Year
Cash
Paid
Interest
Expense
Discount
Amortized
Carrying
Amount of Bonds
Jan. 1, 2017
$
$
$
$
Jan. 1,...
Exercise 14-07 Pronghorn Company sells 8% bonds having a maturity value of $2,000,000 for $1,848,366. The...
Exercise 14-07
Pronghorn Company sells 8% bonds having a maturity value of
$2,000,000 for $1,848,366. The bonds are dated January 1, 2020, and
mature January 1, 2025. Interest is payable annually on January
1.
Determine the effective-interest rate. (Round
answer to 0 decimal places, e.g. 18%.)
The effective-interest rate
%
Set up a schedule of interest expense and discount amortization
under the effective-interest method. (Round
intermediate calculations to 5 decimal places, e.g. 1.25124 and
final answer to 0 decimal places,...
Pearl Company sells 8% bonds having a maturity value of $2,000,000 for $1,848,366. The bonds are dated January 1, 2020, and mature January 1, 2025. Interest is payable annually on January 1. ✓ Your answer is correct. Determine the effective-interest rate. (Round answer to 0 decimal places, e.g. 18%.) The effective-interest rate e Textbook and Media Your answer is partially correct. Set up a schedule of interest expense and discount amortization under the effective interest method. (Round intermediate calculations to...
Novak Company sells 10% bonds having a maturity value of $2,100.000 for $1.948.607. The bonds are dated January 1, 2017, and mature January 1, 2022. Interest is pay able annually on January 1 Set up a schedule of interest expense and discount amortization under the straight line method. (Round answers to decimal places a 38.548.) Schedule of Discount Amortization Straight-Line Method Interest Discount Amortized Year Paid Carrying Amount of Bonds Jan 1, 2017 Jan. 1. 2018 Jan 1, 2019 Jan....
Riverbed Company sells 10% bonds having a maturity value of
$2,550,000 for $2,366,166. The bonds are dated January 1, 2017, and
mature January 1, 2022. Interest is payable annually on January
1.
Set up a schedule of interest expense and discount amortization
under the straight-line method. (Round answers to 0
decimal places, e.g. 38,548.)
Schedule of Discount Amortization
Straight-Line Method
Year
Cash
Paid
Interest
Expense
Discount
Amortized
Carrying
Amount of Bonds
Jan. 1, 2017
$
$
$
$
Jan. 1,...
Exercise 14-07
Pronghorn Company sells 8% bonds having a maturity value of
$2,000,000 for $1,848,366. The bonds are dated January 1, 2020, and
mature January 1, 2025. Interest is payable annually on January
1.
Determine the effective-interest rate. (Round
answer to 0 decimal places, e.g. 18%.)
The effective-interest rate
%
Set up a schedule of interest expense and discount amortization
under the effective-interest method. (Round
intermediate calculations to 5 decimal places, e.g. 1.25124 and
final answer to 0 decimal places,...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 10 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 10 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 10 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 10 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 10 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 10 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 10 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 10 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 10 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 10 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 10 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 10 months ago