Question

Analyzing and journalizing bond transactions

On January 1, 2018, Electricians Credit Union (ECU) issued 8%, 20- year bonds payable with the face value of $400,000. The bonds pay interest on June 30 and December 31. The issue price of the bonds is 104.

Journalize the following bond transactions:

  • Issuance of the bonds on January 1, 2018.
  • Payment of interest and amortization on June 30; 2018.
  • Payment of interest and amortization on December 31, 2018.
  • Retirement of the bond at maturity on December 31, 2037, assuming the last interest payment has already been recorded.
Expert Solution

Want to see the full answer?

Check out a sample Q&A here
Blurred answer
Students who’ve seen this question also like:
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN: 9781337690881
Author: Jay Rich, Jeff Jones
Publisher: Cengage Learning
Not helpful? See similar books
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
Long-term Liabilities. 96PSB
marketing sidebar icon
Want to see this answer and more?
Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*
*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: Analyzing and journalizing bond transactions On January 1, 2018, Electricians Credit Union (ECU)…

A: a.

Q: Analyzing and journalizing bond transactions On January 1, 2018, Educators Credit Union (ECU) issued…

A: Journal Entry: A journal entry is a systematic record of a business transaction of an organization…

Q: Analyzing and journalizing bond transactions On January 1, 2018, Educators Credit Union (ECU) issued…

A: Journalize the following bond transactions:

Q: Analyzing and journalizing bond transactions On January 1, 2018, Educators Credit Union (ECU) issued…

A: Bond financing is an instrument for borrowing the funds. The borrower has to pay a fix amount of…

Q: Analyzing and journalizing bond transactions On January 1, 2018, Doctors Credit Union (DCU) issued…

A: 1. If the market interest rate is 5% when DCU issues its 7% bonds, the bonds will be priced at a…

Q: Analyzing and journalizing bond transactions On January 1, 2018, Nurses Credit Union (NCU) issued…

A: Nurse Credit Union (NCU) issued bonds bearing 8% rate of interest and the expected market rate of…

Q: Analyzing and journalizing bond transactions On January 1, 2018, Nurses Credit Union (NCU) issued…

A: Click to see the answer

Q: Analyzing and journalizing bond transactions On January 1, 2018, the Doctors Credit Union (DCU)…

A: Requirement 1:If the market interest rate is 5% when DCU issues its 7% bonds, the bonds will be…

Q: Amwaj Company issued 129, 10-year bonds with a par value of BD 2,000,000 on January 1, 2018.…

A: Journal Entries are primary record maintained by an entity for the occurrence or non-occurrence of…

Q: MC issued $5million of 20-year, 9.5 percent bonds on July 1, 2018, at 98. Interest is due on June 30…

A: Journal entry: Journal entry is book of original entry used to record the economic event and…

Q: Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $67,000 for $73,507 on January 1,…

A: Given that, rate of interest on bonds = 7% term of the bond = 15years Face value of bonds  $67000…

Q: A company issued $250,000, 8%, 5-year bonds on January 1, 2018.  The market rate of interest was 5%.…

A: GIVEN : Contract Rate = 8% Market rate = 5% Therefore Bonds are issued at premium INTEREST PAYMENT =…

Q: Analyzing and Reporting Financial Statement Effects of Bond TransactionsWinston Inc. reports…

A: Complete the financial statement effects template to reflect the given events:

Q: Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $63,948 on January 1,…

A: Bonds issued at discount: When bonds are issued at price less than the face value then they are…

Q: Hillside issues $4,000,000 of 6%, 15-year bonds dated January 1, 2019, that pay interest…

A: Please note: Since you have posted a question with multiple sub-part, we will solve the first three…

Q: On January 1, 2018, Lane Unlimited issues a 9%, 10- year bonds payable with a face value of…

A: Total premium on bonds = Issue value - Face value = $240,000 x 105/100 - $240,000 = $12,000

Q: On May 1, 2018, Green Corporation issued $1,100,000 of 12% bonds, dated January 1, 2018, for…

A: Click to see the answer

Q: Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $76,860 on January 1,…

A: Bonds: In finance, a bond is an instrument of indebtedness of the bond issuer to the holders. The…

Q: Pretzelmania, Inc., issues 7%, 10-year bonds with a face amount of $70,000 for $70,000 on January 1,…

A: Bond: It refers to a financial instrument that reflects an acknowledgement of debt and states a…

Q: On January 1, 2018, Denver Services issued $20,000 of 8% bonds that mature in five years. The bonds…

A: Given, Bonds Face value = $20,000 Bonds issue price = $19,000

Q: On January 1, 2018, Western Services issued $20,000 of 8% bonds that mature in five years. The bonds…

A: A bond is borrowing security issued by the company by signing a bond agreement in which terms and…

Q: Hillside issues $4,000,000 of 6%, 15-year bonds dated January 1, 2019, that pay interest…

A: Hello, since the student has posted multiple requirements, only the first three is answerable. Thank…

Q: Pretzelmania, Inc., issues 5%, 10-year bonds with a face amount of $59,000 for $59,000 on January 1,…

A: Bonds payable are one of the sources of finance and is shown as liability. If the interest rate is…

Q: National Orthopedics Co. issued 9% bonds, dated January 1, with a face amount of $500,000 on January…

A: 1.

Q: Logan Inc issued a $1,600,000, 6% 10 year bond at 88 on January 1, 2018. 1. Journalize the issuance…

A: Bonds are the debts of an issuing company that is repayable after a specific period of time, it may…

Q: Reporting Financial Statements Effects on Bond TransactionsOn January 1, 2016, McKeown Inc. Issued…

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

Q: Simko Company issued $630,000, 8-year, 6 percent bonds on January 1, 2018. The bonds were issued for…

A: Bonds are generally long-term debt. The company issue bonds for investment purpose and paid interest…

Q: Pretzelmania, Inc., issues 7%, 10-year bonds with a face amount of $70,000 for $70,000 on January 1,…

A: Interest payment on June 30, 2021 = Face value of bonds x rate of interest x 6/12 = $70,000 x 7% x…

Q: On March 1, 2016, Stratford Lighting issued 14% bonds, dated March 1, with a face amount of…

A: Step 1: Record the journal entry for issuance of bonds on March 1, 2016:

Q: Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $76,860 on January 1,…

A: Premium on bonds payable=Issue price-Par value=$76,860-$70,000=$6,860

Q: Bond Interest (Bonds Issued at Face Value)     Green Mountain Power Company obtained authorization…

A: Following are the requisite journal entries

Q: andings Glassware Company issues $1,066,000 of 16%, 10- year bonds at 94 on February 28, 2025. The…

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

Q: On 1/1/2020, Blue Company issued 5-year. 9% bonds with a par value of $1,000,000 The company…

A: Discount on issue of bonds = Par value of bonds - Issue price of bonds = $1,000,000 - $900,000=…

Q: On January 1, 2016, Knorr Corporation issued $1,000,000 of 9%, 5-year bonds dated January 1, 2016.…

A: The question is based on the concept of Financial Accounting.

Q: On August 31, 2021, DASHER Company issued at 104 plus accrued interest, three thousand 10% bonds…

A: The carrying value of a bond is the par value or face value of that bond plus any unamortized…

Q: On January 1, 2018, Kimber Company issued 9% bonds in face amount of P8,000,000, which mature on…

A: Annual interest payment = face value of bonds x rate of interest x no. Of months/12 = P8000000 x 9%…

Q: Reporting Financial Statement Effects of Bond Transactions On January 1, 2016, McKeown, Inc., issued…

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

Q: The Gorman Group issued $900,000 of 13% bonds on June 30, 2021, for $967,707. The bonds were dated…

A: Solution:- Introduction:- Journal entry is the first step in the accounting process. It is used to…

Q: The Gorman Group issued $900,000 of 13% bonds on June 30, 2021, for $967,707. The bonds were dated…

A: 1.

Q: On January 1, 2016, Knorr Corporation issued $1,400,000 of 6%, 5-year bonds dated January 1, 2016.…

A: The initial measurement of the bonds shall be made at fair value. Fair value = Present value of cash…

Q: Sheridan Company issued $279,000, 9%, 15-year bonds on December 31, 2021, for $267,840. Interest is…

A: In the given question we need to prepare the journal entries for following: (a)The issuance of the…

Q: Pharoah Company issued $380,000 of 6%, 20-year bonds on January 1, 2022, at face value. Interest is…

A: The journal entries are prepared to keep the record of day to day transactions of the business.

Q: Clem Company issued $800,000, 10-year, 5 percent bonds on January 1, 2015. The bonds soldfor…

A: In this question, we have required to pass the journal entry of issue of the bond issue and the…

Q: On January 1, 2019, Knorr Corporation issued $1,000,000 of 9%, 5-year bonds dated January 1, 2019.…

A: A bond refers to the instrument which is issued by the government to borrow money when needed. It is…

Q: On January 1, 2019, Knorr Corporation issued $1,000,000 of 9%, 5-yearbonds dated January 1, 2019.…

A: Journal entry is the process of recording the business transactions in the books of accounts for the…

Q: Ellis Company issues 6.5%, five-year bonds dated January 1, 2019, with a $250,000 par value. The…

A: It is a fixed income instrument that represents a loan made by an investor to a borrower ( corporate…

Q: Alexander Company issued $160,000, 12%, 10-year bonds payable at 96 on January 1, 2018.…

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

Q: Diaz Company issued $139,000 face value of bonds on January 1, 2018. The bonds had a 7 percent…

A: Concept:

Q: Jaybird Mining issued $400,000, 6%, 5-year callable bonds payable that pay interest quarterly on…

A: Under the effective interest method, the interest expense to be recorded is computed according to…

Q: On January 1, 2019, Drake Services issued $20,000 of 8% bonds that mature in five years. The bonds…

A: Bonds are instruments that help the entity to raise funding for the business. It is pertinent to…

Knowledge Booster
Accounting
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.
Recommended textbooks for you
  • Cornerstones of Financial Accounting
    Accounting
    ISBN:9781337690881
    Author:Jay Rich, Jeff Jones
    Publisher:Cengage Learning
    Financial Accounting
    Accounting
    ISBN:9781305088436
    Author:Carl Warren, Jim Reeve, Jonathan Duchac
    Publisher:Cengage Learning
    Intermediate Accounting: Reporting And Analysis
    Accounting
    ISBN:9781337788281
    Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
    Publisher:Cengage Learning
  • Financial And Managerial Accounting
    Accounting
    ISBN:9781337902663
    Author:WARREN, Carl S.
    Publisher:Cengage Learning,
    College Accounting, Chapters 1-27
    Accounting
    ISBN:9781337794756
    Author:HEINTZ, James A.
    Publisher:Cengage Learning,
    Financial Accounting: The Impact on Decision Make...
    Accounting
    ISBN:9781305654174
    Author:Gary A. Porter, Curtis L. Norton
    Publisher:Cengage Learning
  • Cornerstones of Financial Accounting
    Accounting
    ISBN:9781337690881
    Author:Jay Rich, Jeff Jones
    Publisher:Cengage Learning
    Financial Accounting
    Accounting
    ISBN:9781305088436
    Author:Carl Warren, Jim Reeve, Jonathan Duchac
    Publisher:Cengage Learning
    Intermediate Accounting: Reporting And Analysis
    Accounting
    ISBN:9781337788281
    Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
    Publisher:Cengage Learning
    Financial And Managerial Accounting
    Accounting
    ISBN:9781337902663
    Author:WARREN, Carl S.
    Publisher:Cengage Learning,
    College Accounting, Chapters 1-27
    Accounting
    ISBN:9781337794756
    Author:HEINTZ, James A.
    Publisher:Cengage Learning,
    Financial Accounting: The Impact on Decision Make...
    Accounting
    ISBN:9781305654174
    Author:Gary A. Porter, Curtis L. Norton
    Publisher:Cengage Learning