1. Santos SA issues $300,000 in bonds dated January 1, 2022, due in five years with 9 percent interest payableannually on January 1. At the time of issue, the market rate for such bonds is 9percent.a) Illustrate the bond in lineas principal invested and interest rate.b) Check the value of bound is it sold at par value.c) Register accountingtransactions on journal entries.

The bond issued by Santos SA has a principal (face value) of $300,000. This is the amount that…

Answered: 1. Santos SA issues $300,000 in bonds…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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3. On July 1, 2018, Volunteer Inc. issued bonds with a $500,000 face value at 108.0 and the 5-year bonds have a 10% interest rate in a market with a rate of 8%. Interest is payable semi-annually and the effective-interest method is used for amortization. Prepare journal entries for the following transactions. Premium on Bonds Payable Interest Income Discount on Bonds Payable Interest Expense Cash Bonds Payable PLEASE NOTE: For each of the following journal entries there is one account's treatment (DR or CR), that depends on whether it is a bond issued at a premium or a discount. You are to identify if it is a DR or a CR. You must enter the account names exactly as written above and all dollar amounts will be rounded to whole dollars with "$" and commas as needed (i.e. $12,345). July 1, 2018: to record issuing the bonds DR DR/CR ? CR Dec. 31, 2018: to record the amortization & payment of interest to bondholders: DR…
Metlock Ltd. issued a $791,000, 10-year bond dated January 1, 2023. The bond was sold to yield 12% effective interest. The bond paid 10% interest on January 1 and July 1 each year. The company's year-end was December 31, and Metlock followed IFRS. Using 1. factor Tables 2. a financial calculator, or 3. Excel function PV, calculate the amount received for the bond, and any discount or premium on the bond. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ORDINARY ANNUITY OF 1. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places e.g. 58,971.) Proceeds from sale of bond Discount on bond Prepare the journal entries for above transactions. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the…
On January 1, 2024, Anne Teak Furniture issued $100,000 of 12% bonds, dated January 1. Interest is payable semiannually on June 30 and December 31. The bonds mature in 4 years. The annual market rate for bonds of similar risk and maturity is 14%. What was the issue price of the bonds? Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Multiple Choice $89,460 $120,942 $95,460 $94,029
On January 1, 2024, Robert Unlimited issues 8%, 20-year bonds payable with a face value of $240, 000 The bonds are issued at 104 and pay interest on June 30 and December 31. (Assume bond payable are amortized using the straight-line amortization method.) Read the requirements. Requirement 1. Journalize the issuance of the bonds on January 1, 2024. (Record debits first, then credits. Select explanations on the last line of the journal entry.) \table[[Date, Accounts and Explanation, Debit, Credit ], [2024], [Jan. 1]...........] Requirements Joumalize the issuance of the bonds on January 1, 2024. Journalize the semiannual interest payment and amortization of bond premium on June 30, 2024. Journalize the semiannual interest payment and amortization of bond premium on December 31, 2024 Journalize the retirement of the bond at maturity, assuming the last interest payment has already been recorded. (Give the date.)
On January 1, 2021, Bradley Recreational Products issued $100,000, 9%, four year bonds. Interest is paid semiannually on June 30 and December 31. The market yield for bond of similar risk and maturity is 7%. The fiscal year for the firm ends on December 31. A. Determine the price of the bonds issued on January 1. B. Prepare the amortization schedule for the bonds using the effective interest rate method. C. Prepare the journal entries to record: • Issuing bonds on January 1 • Paying interest on June 30, 2021 • Paying interest on Dec 31, 2021 • Repayment of the bonds on December 31, 2025.
. On 1/1/21, Ehrlich Co. issued 4 year bonds with a face value of $700,000. The stated (bond) rate is 8%, payable semiannually on 1/1 and 7/1. The market rate at the time of issuance was 10%. a. Calculate the issue price of the bonds. b. Prepare the journal entry for the issuance of the bonds. c. Complete the amortization table below. Date cash paid interest expense amortization carrying value 1/1/21 7/1/21 1/1/22 7/1/22 d. Prepare the journal entries for the 7/1/21 interest payment and amortization, 12/31/21 interest accrual and amortization, and 1/1/22 interest payment. e. Prepare the journal entry for retirement of the bonds at maturity f. Assume instead that the bonds were redeemed on 7/1/22 at 102. Prepare the journal entry.
On January 1, 2023, Kristopher Co. issued ten-year bonds with a face value of $7,000,000 and a stated interest rate of 5%, payable semiannually on June 30 and December 31. The bonds were sold to yield 4%. Required: a. Calculate the issue price of the bonds. b. Prepare journal entries for the issuance on January 1, 2023 and the June 30, 2023 interest payment date, assuming the company uses the effective interest method for amortizing any premium or discount. calculate in excel format calculate the issue price of bonds
tELLiy, you must enter your ID number on the first sheet! On January 1, 2020 Omsk Corporation issued Bonds pay interest each July 1 and January 1. 150,000 of 5 % bonds, due in 17 years 12 % market rate of interest. Assume Requirements (Round to 0 decimals, Rounding errors do not matter): 1. Compute market price of bonds. Provide detailed computation. Use functions in Excel 2. What is an amount of discount /premium? Indicate, what it is (discount or premium). Computation. 3. Prepare amortization schedule for first 5 years. Use formulas in Excel. 4. Prepare journal entry to record bond issue. 5. Prepare journal entry on July 1, 2020. 6. Prepare journal entry on December 31, 2020. 7. Prepare journal entry on January 1, 2021
(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.
answer is A: how do you get to this answers?
An accounting example: Otter Products inc issued bonds on January 1, 2019. Interest to be paid semi-annually. Term in years is 2; Face value of bonds issued is $200,000; Issue Price $206,000; Specified Interest Rate each payment period is 6% Question. Calculate a. the amount of interest paid in cash every payment period. b. The amount of amortization to be recorded at each interest payment date (use straight-line method) c. complete amoritzation table by calculating interest expense and beginning and ending bond carrying amounts at the each period over 2 years. The term is for 2 years however 3 years is showing on the workbook. How do I calcuate the 3rd year if the problem only says the term is 2 years?
Ivanhoe Corporation has issued three different bonds during 2024. Interest is payable annually on each of these bonds. (a) Your answer is partially correct. On January 1, 2024, Ivanhoe issued 1,050, 8%, 5-year, $1,000 bonds dated January 1, 2024, at face value. Prepare the journal entry to record the bond transaction at the date of issue. (List debit entry before credit entry. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles Debit Credit Jan. 1 Cash Bonds Payable

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