Answered: A $200,000 4 year bond was issued for…

A $200,000 4 year bond was issued for $210,000. The semi-annual amortization of the bond premium using the straight-line method equals $________________

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 5MC

See similar textbooks

Related questions

Q: On January 1, 2021, White Water issues $600,000 of 7% bonds, due in 10 years, with interest payable…

A: Date (A) Interest payment(B)7%* face value interest expenses(C) carrying value*8% Amortisation…

Q: Marwick Corporation issues 8%, 5 year bonds with a par value of $1,200,000 and semiannual interest…

A: Interest rate on bond : 8/2= 4% ( Divided by 2 because it is mentioned semiannual interest ) Time =…

Q: On January 1, 2020, Metro Inc. issued a five-year bond with a face value of $700,000. The bond bears…

A: Discount or Premium on Bond Issue: A premium bond has a coupon rate that is greater than the market…

Q: On December 31, 2020, Plank Corporation issued $800,000, 6%, 5-year bonds for $735,100. The bonds…

A: PREPARATION OF BOND DISCOUNT SCHEDULE

Q: On January 1, 2018, Reese Incorporated issued bonds with a face value of $120,000, a stated rate of…

Q: A ten-year bond issue of $400,000, interest rate of 9% paid semiannually, is sold for $440,000 when…

A: Premium on bonds payable = Issue price - Face value of bonds = $440000 - $400000 = $40000

Q: ed ten-year bonds with a face value of $5,000,000 and a stated interest rate of 6%, payable…

A: Bonds are priced by discounting future cash flows. Future cash flows include coupons and par value…

Q: On January 1, 2018, Parker Company issued bonds with a face value of $63,000, a stated rate of…

A: Amortization means decrease in the amount of debt over a period of time by paying some amount…

Q: On March 1, 2021, BabyM company issued a four-year, P3,000,000 face value, 11% term bonds for…

A: Bonds issued at Premium: When a bond is issued at a premium, that means that the bond is sold for an…

Q: When the market rate of interest was 12%, Halprin Corporation issued s768,000, 11%, five year bonds…

A: Lets understand the basics. When market interest rate is more than the bond interest rate bond is…

Q: On January 1, 2021, Toit Company issued a 10-year 9% bonds payable of P10,000,000 for a market rate…

A: Present value of bond:-

Q: On Mar. 1, 2022, Top Company issued P 700,000 of 10% bonds to yield 8%. Interest is payable…

A: Issue price of bonds will be present value of maturity & interest annuity at yield rate.

Q: On December 31, 2020, Dome Company issued P 4,000,000, 8% serial bonds, to be repaid in the amount…

A: The interest method of amortization of discount is the method used to amortize the discount or…

Q: On June 1, 2019, Swifty Company sold $2,460,000 in long-term bonds for $2,157,700. The bonds will…

A: Interest payment = $2,460,000*8% Interest payment = $196,800

Q: On July 1, 2019, Fewa Company issued P4,000,000 of 16% bonds to yield 14%. Interest is payable…

Q: On January 1, 2020, Johny Industries issued ten-year bonds with a face value of $2,000,000 and a…

A: The bonds are the financial instruments for the business which are used to raise money from the…

Q: Cullumber Company issued $510000 of 8% 5-year bonds at 107, which pay interest annually Assuming…

A: Lets understand the basics. There are two method for amortizing bond premium/discount which are, (1)…

Q: A $ 25, 000, 5% bond payable semi-annually is purchased seven years before maturity. Calculate the…

A: Solution:- Bonds are the securities issued by the corporations and governments, under which the…

Q: On January 1, a company issues 8%, 5 year, $300,000 bonds that pay interest semiannually each June…

A: Companies often use bonds to raise money to expand its business, to conduct normal operations etc…

Q: Quatro Company issues bonds dated January 1, 2021, with a par value of $900,000. The bonds' annual…

A: When a corporation sells bonds to earn cash, bonds payable are recognized. The corporation is a…

Q: On January 1, 2018, Parker Company issued bonds with a face value of $63,000, a stated rate of…

A: Since we are entitled to answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the…

Q: On January 1, 2021, MACADAMIA Company issued 5 year bonds with face value of ₱5,000,000 at 110. The…

A: Amount received from the bond issuance = (Face value of bonds x issue price/100) - bond issue cost…

Q: At the beginning of this year, MM purchased P6,000,000, 9% face amount bonds. The interest is…

A: For calculating the issue price of bonds , we need to calculate the present value of future cash…

Q: Tano Company issues bonds with a par value of $87,000 on January 1, 2021. The bonds' annual contract…

A: Introduction: Bonds are issued to finance ongoing maintenance as well as infrastructure upgrades.…

Q: On January 1, 2021, BBB Company issued 10% bonds payable dated January 1, 2021 with a face amount of…

A: Present Value of Bond = PV of Coupon Payments + PV of Redemption Value PV of Coupon Payments =…

Q: On January 1, 2021, White Water issues $600,000 of 7% bonds, due in 10 years, with interest payable…

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: A $500,000, ten year, 7% bond issue was sold to yield 6% interest payable annually. Actuarial…

A: Answer: Correct option is A: $36,798 premium

Q: P642,007.30 in b

A: Introduction Present value of bond:-

Q: On March 31, 2020, Adtech Inc. issued $200,000, 9%,10-year bonds. The bonds pay interest…

A: Prepare journal entries as follows: Result:

Q: On January 1, 2013, Aldrine Company issued 3 year bonds with face value of P5,000,000 at 99. The…

A: Interest expense is the cost of borrowing money that lender charges a borrower.

Q: On January 1, 2021, EXPERT EFFORT Company purchased serial bonds with face value of P3,000,000 and…

A: Under the amortized cost method, present value of the bond can be calculated by discounting all the…

Q: On January 1, 2021, Lambda, Inc. issued ten-year bonds with a face value of $1,000,000 and an annual…

A: Bonds issued at discount: Bonds are said to be issued at discount if the issue price is less than…

Q: On January 1, 2021, Cheyenne Co. issued ten-year bonds with a face value of $4,700,000 and a stated…

A: Calculate the issue price of the bonds.

Q: On January 1, 2020, Bonita Industries issued eight-year bonds with a face value of $5950000 and a…

A: Present value of principal = Face value of the bonds x Present value factor at market rate

Q: Moss Co. issued $101,000 of five-year, 12% bonds with interest payable semiannually, at a market…

A: Given information: issue price of the bonds $101,000 interest rate 12% effective interest…

Q: On June 30, 2024, LN Bean issued $25 million of its 8% bonds for $23 million. The bonds were priced…

A: Interest expense is the amount of charge which is paid by the person who uses the funds. In this…

Q: On January 1, 2021, White Water issues $600,000 of 7% bonds, due in 10 years, with interest payable…

A: Date (A) Interest payment(B) Interest expenses (C) Amortisation on bond discount(C-B=D) Debit…

Q: a) Using the effective interest rate method, what is the interest expense at December 31, 2018?…

A: = Bond Issue Price × Rate for market yield= $1,250,000 × 5100=$62,500 =

Q: On January 1, 2021, a company issued serial bonds with a face value of 3,000,000 and a stated rate…

A: Carrying value of the bonds = Present value of principal + Present value of interest payments where,…

Q: On January 1, 2021, LMN Company issued 10-year bonds with a face amount of P3,000,000 at a stated…

A: Issue price of the bonds = Present value of principal + Present value of interest payments where,…

Q: Swifty Corporation issued $420000 of 8%, 5-year bonds at 105, with interest paid annually. Assuming…

A: Bonds are considered a financial instrument used to raise finance for the organization. It is also…

Q: A $650,000 bond issue on which there is an unamortized discount of $45,00, is redeemed for $600,000.…

A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Q: Enviro Company issues 12.50%, 10-year bonds with a par value of $470,000 and semiannual interest…

A: Cash proceeds from the issue of bond = Par value x Selling price, Semi-annual interest expense =…

Q: XYZ company issues R$100,000 in bonds dated January 1, 2020, due in five years with 9 percent…

A: Issue Price of the bonds = Present value of principal + Present value of interest payments = face…

Q: On June 30, 2020, Pearl Company issued $3,990,000 face value of 14%, 20-year bonds at $4,590,340, a…

A: Face value of bonds= $3990000 No of years=20 years interest rate= 14% Yield rate= 12% Cash received…

Q: On January 1, 2020, Pine Co. issued 10%, 10-year bonds with a face value of $12,000,000. The bonds…

A: Bonds payable are a form of long term debt usually issued by corporations, hospitals, and…

Q: Shaq Corporation issued $10,000 of 20-year bonds on January 1, 2024. The bonds pay interest…

A: Lets understand the basics. Effetive interest rate is a rate which company actually paying interest.…

Q: At the beginning of current year, Marble Co. issued 10-year bonds with a face amount of P 5,000,000…

A: PV of Principal = PV of Coupon Payments + PV of Redemption Value PV of Coupon Payments = Coupon…

Q: If the amount of a bond premium on an issued 11%, four-year, $100,000 bond is $12,928, the annual…

A: A bond is basically an interest-bearing loan instrument that is issued by the companies in order to…

Question

A $200,000 4 year bond was issued for $210,000. The semi-annual amortization of the bond premium using the straight-line method equals $________________

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

A company issued bonds with a $100,000 face value, a 5-year term, a stated rate of 6%, and a market rate of 7%. Interest is paid annually. What is the amount of interest the bondholders will receive at the end of the year?
On July 1, a company sells 8-year $250,000 bonds with a stated interest rate of 6%. If interest payments are paid annually, each interest payment will be ________. A. $120,000 B. $60,000 C. $7,500 D. $15,000
On January 1, a company issued a 5-year $100,000 bond at 6%. Interest payments on the bond of $6,000 are to be made annually. If the company received proceeds of $112,300, how would the bonds issuance be quoted? A. 1.123 B. 112.30 C. 0.890 D. 89.05
Diana Inc. issued $100,000 of its 9%, 5-year bonds for $96,149 when the market rate was 10%. The bonds pay interest semi-annually. Prepare an amortization table for the first three payments.
Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the market rate was 6%. Interest was paid semi-annually. Calculate and explain the timing of the cash flows the purchaser of the bonds (the investor) will receive throughout the bond term. Would an investor be willing to pay more or less than face value for this bond?
On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?
Charleston Inc. issued $200,000 bonds with a stated rate of 10%. The bonds had a 10-year maturity date. Interest is to be paid semi-annually and the market rate of interest is 8%. If the bonds sold at 113.55, what amount was received upon issuance?
On July 1, Somerset Inc. issued $200,000 of 10%, 10-year bonds when the market rate was 12%. The bonds paid interest semi-annually. Assuming the bonds sold at 58.55, what was the selling price of the bonds? Explain why the cash received from selling this bond is different from the $200,000 face value of the bond.
Starmount Inc. sold bonds with a $50,000 face value, 12% interest, and 10-year term at $48,000. What is the total amount of interest expense over the life of the bonds?
Piedmont Corporation issued $200,000 of 10-year bonds at par. The bonds have a stated rate of 6% and pay interest annually. What is the journal entry to record the first interest payment to the bondholders?
Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market rate of 4%. The bonds paid interest semi-annually on June 30 and Dec. 31. How much money did the company receive when the bonds were issued? The bonds would be quoted at what rate?
Evie Inc. issued 50 bonds with a $1,000 face value, a five-year life, and a stated annual coupon of 6% for $980 each. What is the total amount of interest expense over the life of the bonds?