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Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $8,100,000 of 9-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $7,644,536. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 5.  Compute the price of $7,644,536 received for the bonds by using Table 1, Table 2, Table 3 and Table 4. (Round to the nearest dollar.) Your total may vary slightly from the price given due to rounding differences. Present value of the face amount   Present value of the semiannual interest payments   Price received for the bonds

Question

Bond Discount, Entries for Bonds Payable Transactions

On July 1, Year 1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $8,100,000 of 9-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $7,644,536. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.

Required:

5.  Compute the price of $7,644,536 received for the bonds by using Table 1, Table 2, Table 3 and Table 4. (Round to the nearest dollar.) Your total may vary slightly from the price given due to rounding differences.

Present value of the face amount  
Present value of the semiannual interest payments  
Price received for the bonds

 

Present Value of $1 at Compound Interest Duein n Periods
Periods
8%
9%
10%
11%
12%
13%
14%
1
0.92593
0.91743
0.90909
0.90090
0.89286
0.88496
0.87719
2
0.85734
0.84168
0.82645
0.81162
0.79719
0.78315
0.76947
3
0.79383
0.772 18
0.75131
0.73119
0.71178
0.69305
0.67497
4
0.73503
0.70843
0.68301
0.65873
0.63552
0.61332
0.59208
0.68058
0.64993
0.62092
0.59345
0.56743
054276
0.51937
0.63017
0.59627
0.56447
0.53464
0.50663
0.48032
0.45559
7
0.58349
0.54703
0.51316
0.48166
0.45235
0.42506
0.39964
8
054027
0.50187
0.46651
043393
0.40388
037616
0.35056
9.
0.50025
0.46043
0.42410
0.39092
0.36061
0.33288
0.30751
10
0.46319
0.42241
0.38554
0.35218
0.32197
0.29459
0.26974
11
042888
0.38753
0.35049
0.31728
0.28748
0.26070
0.23662
12
0.39711
0.35553
0.31863
0.28584
0.25668
0.23071
0.20756
13
036770
0.32618
0.28966
025751
022917
0.20416
0.18207
14
0.34046
0.29925
0.26333
0.23199
0.20462
0.18068
0.15971
15
031524
0.27454
0.23939
020900
0.18270
0.15989
0.14010
16
0.29189
0.25187
0.21763
0.18829
0.16312
0.14150
0.12289
17
027027
0.23107
0.19784
0.16963
0.14564
0.12522
0.10780
18
0.25025
0.21199
0.17986
0.15282
0.13004
0.11081
0.09456
19
0.23171
0.19449
0.16351
0.13768
0.11611
0.09806
0.08295
20
021455
0.17843
0.14864
0.12403
0.10367
0.08678
0.07276
21
0.19866
0.16370
0.13513
0.11174
0.09256
0.07680
0.06383
22
0.18394
0.15018
0.12285
0.10067
0.08264
0.06796
0.05599
23
0.17032
0.13778
0.11168
0.09069
0.07379
0.06014
0.04911
24
0.15770
0.12640
0.10153
0.08170
0.06588
0.05323
0.04308
25
0.14602
0.11597
0.09230
0.07361
0.05882
0.04710
0.03779
26
0.13520
0.10639
0.08391
0.06631
0.05252
0.04168
0.03315
27
0.12519
0.09761
0.07628
0.05974
0.04689
0.03689
0.02908
28
0.11591
0.08955
0.06934
0.05382
0.04187
0.03264
0.02551
29
0.10733
0.082 15
0.06304
0,04849
0.03738
0.02889
0.02237
30
0.09938
0.07537
0.05731
0.04368
0.03338
0.02557
0.01963
31
0.09202
0.06915
0.05210
0.03935
0.02980
0.02262
0.01722
32
0.08520
0.06344
0.04736
0.03545
0.02661
0.02002
0.01510
33
0.07889
0.05820
0.04306
0.03194
0.02376
0.01772
0.01325
34
0.07305
0.05339
0.03914
0.02878
0.02121
0.01568
0.01162
35
0.06763
0.04899
0.03558
0.02592
0.01894
0.01388
0.01019
40
0.04603
0.03184
0.02209
0.01538
0.01075
0.00753
0.00529
45
0.03133
0.02069
0.01372
0.00913
0.00610
0.00409
0.00275
50
0.02132
0.01345
0.00852
0.00542
0.00346
0.00222
0.00143
expand button
Transcribed Image Text:Present Value of $1 at Compound Interest Duein n Periods Periods 8% 9% 10% 11% 12% 13% 14% 1 0.92593 0.91743 0.90909 0.90090 0.89286 0.88496 0.87719 2 0.85734 0.84168 0.82645 0.81162 0.79719 0.78315 0.76947 3 0.79383 0.772 18 0.75131 0.73119 0.71178 0.69305 0.67497 4 0.73503 0.70843 0.68301 0.65873 0.63552 0.61332 0.59208 0.68058 0.64993 0.62092 0.59345 0.56743 054276 0.51937 0.63017 0.59627 0.56447 0.53464 0.50663 0.48032 0.45559 7 0.58349 0.54703 0.51316 0.48166 0.45235 0.42506 0.39964 8 054027 0.50187 0.46651 043393 0.40388 037616 0.35056 9. 0.50025 0.46043 0.42410 0.39092 0.36061 0.33288 0.30751 10 0.46319 0.42241 0.38554 0.35218 0.32197 0.29459 0.26974 11 042888 0.38753 0.35049 0.31728 0.28748 0.26070 0.23662 12 0.39711 0.35553 0.31863 0.28584 0.25668 0.23071 0.20756 13 036770 0.32618 0.28966 025751 022917 0.20416 0.18207 14 0.34046 0.29925 0.26333 0.23199 0.20462 0.18068 0.15971 15 031524 0.27454 0.23939 020900 0.18270 0.15989 0.14010 16 0.29189 0.25187 0.21763 0.18829 0.16312 0.14150 0.12289 17 027027 0.23107 0.19784 0.16963 0.14564 0.12522 0.10780 18 0.25025 0.21199 0.17986 0.15282 0.13004 0.11081 0.09456 19 0.23171 0.19449 0.16351 0.13768 0.11611 0.09806 0.08295 20 021455 0.17843 0.14864 0.12403 0.10367 0.08678 0.07276 21 0.19866 0.16370 0.13513 0.11174 0.09256 0.07680 0.06383 22 0.18394 0.15018 0.12285 0.10067 0.08264 0.06796 0.05599 23 0.17032 0.13778 0.11168 0.09069 0.07379 0.06014 0.04911 24 0.15770 0.12640 0.10153 0.08170 0.06588 0.05323 0.04308 25 0.14602 0.11597 0.09230 0.07361 0.05882 0.04710 0.03779 26 0.13520 0.10639 0.08391 0.06631 0.05252 0.04168 0.03315 27 0.12519 0.09761 0.07628 0.05974 0.04689 0.03689 0.02908 28 0.11591 0.08955 0.06934 0.05382 0.04187 0.03264 0.02551 29 0.10733 0.082 15 0.06304 0,04849 0.03738 0.02889 0.02237 30 0.09938 0.07537 0.05731 0.04368 0.03338 0.02557 0.01963 31 0.09202 0.06915 0.05210 0.03935 0.02980 0.02262 0.01722 32 0.08520 0.06344 0.04736 0.03545 0.02661 0.02002 0.01510 33 0.07889 0.05820 0.04306 0.03194 0.02376 0.01772 0.01325 34 0.07305 0.05339 0.03914 0.02878 0.02121 0.01568 0.01162 35 0.06763 0.04899 0.03558 0.02592 0.01894 0.01388 0.01019 40 0.04603 0.03184 0.02209 0.01538 0.01075 0.00753 0.00529 45 0.03133 0.02069 0.01372 0.00913 0.00610 0.00409 0.00275 50 0.02132 0.01345 0.00852 0.00542 0.00346 0.00222 0.00143
Present Value of Ordinary Annuity of $1 per Period
Periods
8%
9%
10%
11%
12%
13%
14%
1
0.92593
0.91743
0.90909
0.90090
0.89286
0.88496
0.87719
1.78326
1.75911
1.73554
1.71252
1.69005
1.66810
1.64666
3
2.57710
2.53129
248685
2.44371
240183
2.36115
232163
4
3.31213
3.23972
3.16987
3.10245
3.03735
2.97447
2.91371
3.99271
3.88965
3.79079
3.69590
3.60478
3.51723
3.43308
4.62288
4.48592
4.35526
4.23054
4.11141
3.99755
3.88867
520637
5.03295
4.86842
4.71220
4.56376
4.42261
4.28830
5.74664
5.53482
5.33493
5.14612
4.96764
4.79677
4.63886
6.24689
5.99525
5.75902
553705
5.32825
5.13166
4.94637
10
6.71008
6.41766
6.14457
588923
5.65022
5.42624
5.21612
11
7.13896
6.80519
6.49506
620652
5.93770
5.68694
5.45273
12
7.53608
7.16073
6.81369
6.49236
6.19437
5.91765
5.66029
13
7.90378
7.48690
7.10336
6.74987
6.42355
6.12181
5.84236
14
822424
7.78615
7.36669
6.96187
6.62817
630249
6.00207
15
8.55948
8.06069
7.60608
7.19087
6.81086
6.46238
6.14217
16
885137
8.31256
7.82371
737916
6.97399
6.60388
6.26506
17
9.12164
8.54363
8.02155
7.54879
7.11963
6.72909
6.37286
18
937189
8.75563
8.20141
7.70162
7.24967
6.83991
6.46742
19
9.60360
8.95011
8.36492
783929
7.36578
693797
6.55037
20
9.81815
9.12855
8.51356
7.96333
7.46944
7.02475
6.62313
21
10.01680
9.29224
8.64869
8.07507
7.56200
7.10155
6.68696
22
10.20074
9.44243
8.77154
8.17574
7.64465
7.16951
6.74294
23
10.37106
9.58021
8.88322
8.26643
7.71843
7.22966
6.79206
24
1052876
9.70661
8.98474
834814
7.78432
728288
6.835 14
25
10.67478
9.82258
9.07704
8.42174
7.84314
7.32998
6.87293
26
10.80998
9.92897
9.16095
8.48806
7.89566
7.37167
6.90608
27
10.93516
10.02658
9.23722
8.54780
7.94255
7.40856
6.93515
28
11.05108
10.11613
9.30657
8.60162
7.98442
7.44120
6.96066
29
11.15841
10.19828
9.36961
8.65011
8.02181
7.47009
6.98304
30
11.25778
10.27365
9.42691
8.69379
8.05518
7.49565
7.00266
31
11.34980
10.34280
9.47901
8.73315
8.08499
7.51828
7.01988
32
11.43500
10.40624
9.52638
8.76860
8.11159
753830
7.03498
33
11.51389
10.46444
9.56943
8.80054
8.13535
755602
7.04823
34
11.58693
10.51784
9.60857
8.82932
8.15656
7.57170
7.05985
35
11.65457
10.56682
9.64416
8.85524
8.17550
7.58557
7.07005
40
11.92461
10.75736
9.77905
8.951 05
8.24378
7.63438
7.10504
45
1210840
10.88120
9.86 281
9.00791
8.28252
7.66086
7.12322
50
12.23348
10.96168
9.91481
9.04165
830450
7.67524
7.13266
expand button
Transcribed Image Text:Present Value of Ordinary Annuity of $1 per Period Periods 8% 9% 10% 11% 12% 13% 14% 1 0.92593 0.91743 0.90909 0.90090 0.89286 0.88496 0.87719 1.78326 1.75911 1.73554 1.71252 1.69005 1.66810 1.64666 3 2.57710 2.53129 248685 2.44371 240183 2.36115 232163 4 3.31213 3.23972 3.16987 3.10245 3.03735 2.97447 2.91371 3.99271 3.88965 3.79079 3.69590 3.60478 3.51723 3.43308 4.62288 4.48592 4.35526 4.23054 4.11141 3.99755 3.88867 520637 5.03295 4.86842 4.71220 4.56376 4.42261 4.28830 5.74664 5.53482 5.33493 5.14612 4.96764 4.79677 4.63886 6.24689 5.99525 5.75902 553705 5.32825 5.13166 4.94637 10 6.71008 6.41766 6.14457 588923 5.65022 5.42624 5.21612 11 7.13896 6.80519 6.49506 620652 5.93770 5.68694 5.45273 12 7.53608 7.16073 6.81369 6.49236 6.19437 5.91765 5.66029 13 7.90378 7.48690 7.10336 6.74987 6.42355 6.12181 5.84236 14 822424 7.78615 7.36669 6.96187 6.62817 630249 6.00207 15 8.55948 8.06069 7.60608 7.19087 6.81086 6.46238 6.14217 16 885137 8.31256 7.82371 737916 6.97399 6.60388 6.26506 17 9.12164 8.54363 8.02155 7.54879 7.11963 6.72909 6.37286 18 937189 8.75563 8.20141 7.70162 7.24967 6.83991 6.46742 19 9.60360 8.95011 8.36492 783929 7.36578 693797 6.55037 20 9.81815 9.12855 8.51356 7.96333 7.46944 7.02475 6.62313 21 10.01680 9.29224 8.64869 8.07507 7.56200 7.10155 6.68696 22 10.20074 9.44243 8.77154 8.17574 7.64465 7.16951 6.74294 23 10.37106 9.58021 8.88322 8.26643 7.71843 7.22966 6.79206 24 1052876 9.70661 8.98474 834814 7.78432 728288 6.835 14 25 10.67478 9.82258 9.07704 8.42174 7.84314 7.32998 6.87293 26 10.80998 9.92897 9.16095 8.48806 7.89566 7.37167 6.90608 27 10.93516 10.02658 9.23722 8.54780 7.94255 7.40856 6.93515 28 11.05108 10.11613 9.30657 8.60162 7.98442 7.44120 6.96066 29 11.15841 10.19828 9.36961 8.65011 8.02181 7.47009 6.98304 30 11.25778 10.27365 9.42691 8.69379 8.05518 7.49565 7.00266 31 11.34980 10.34280 9.47901 8.73315 8.08499 7.51828 7.01988 32 11.43500 10.40624 9.52638 8.76860 8.11159 753830 7.03498 33 11.51389 10.46444 9.56943 8.80054 8.13535 755602 7.04823 34 11.58693 10.51784 9.60857 8.82932 8.15656 7.57170 7.05985 35 11.65457 10.56682 9.64416 8.85524 8.17550 7.58557 7.07005 40 11.92461 10.75736 9.77905 8.951 05 8.24378 7.63438 7.10504 45 1210840 10.88120 9.86 281 9.00791 8.28252 7.66086 7.12322 50 12.23348 10.96168 9.91481 9.04165 830450 7.67524 7.13266
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A: Journalize the entries are as follows: Date Accounts title and explanation Debit $ Credit…

Q: Bond Premium, Entries for Bonds Payable Transactions Rodgers Corporation produces and sells…

A: Bonds payable: It is a long term liability to the organization issuing it. It is issued to raise…

Q: Entries for issuing bonds and amortizing discount by straight-linemethodOn the first day of its…

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

Q: On the first day of the fiscal year, a company issues a $3,500,000, 6%, five-year bond that pays…

A: Under straight line amortisation, the bond discount is amortised equally in each year.

Q: Favreau Corporation wholesales repair products to equipment manufacturers. On April 1, Year 1,…

A: Bonds payable are a form of loan or amount taken by the business, on which regular interest payments…

Q: Favreau Corporation wholesales repair products to equipment manufacturers. On April 1, Year 1,…

A: Market / Effective rate : 11% p.a. or 5.5% semi-annually Term of bond = 7 Years Semi-annual interest…

Q: Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley…

A: Number of half years=Number of years×2=5×2=10 half-years

Q: Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley…

A: Premium on bonds to be amortized = Cash received – Face value of bond…

Q: Issuing bonds at a discountOn the first day of the fiscal year, a company issues a $3,500,000, 6%…

A: Premium (discount) on bonds issue =   Issue value - face value of bonds = $3,350,000 - $3,500,000 =…

Q: Entries for bonds payable, including bond redemptionThe following transactions were completed by…

A: SOLUTION- BONDS-  BONDS ARE LONG TERM PROMISSORY NOTES THAT ARE ARE REPRESENTED BY THE COMPANY WHILE…

Q: Entries for Bonds Payable, including bond redemption The following transactions were completed by…

A: In this question , the requirement asked is of accounting for bonds in books of Montague Inc. which…

Q: Issuing Bonds at a Discount On the first day of the fiscal year, a company issues a.$4,200,000, 10%,…

A: Bonds are issued by the companies to get the financial resources for working. It is a cheaper source…

Q: Issuing Bonds at a Discount On the first day of the fiscal year, a company issues a $4,700,000, 6%,…

A: Journal entry to record the issuance of bonds: Date Account Titles Debit ($) Credit ($) xxx…

Q: Jones Company issued bonds with a $160,000 face value on January 1, Year 1. The five-year term bonds…

A: Working: Interest expense = Interest paid+Discount on bonds…

Q: On the first day of the current fiscal year, $200,000 of 10-year, 7% bonds, with interest payable…

A: Premium on Bonds Payable: When the bonds are issued at more than the fair value, then it is known as…

Q: Entries for Issuing Bonds and Amortizing Premium by Straight-Line Method Smiley Corporation…

A: Semiannual interest payment = Face value of bonds  xrate of interest x no.of months / 12 =…

Q: On January 1, Hurley Corporation issues $1,000,000, 5-year, 12% bonds at 96 with interest payable on…

A: Bonds are a form of debt taken by the company. When bonds are issued at a discount or premium, then…

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