Cash Proceeds Discount or Premium a. Pear, Inc. issued $225,000 of 10-year, 8 percent bonds at 101. b. Apple, Inc. issued $133,000 of five-year, 12 percent bonds at 98. c. Cherry Co. issued $158,000 of five-year, 6 percent bonds at 102 1/4. d. Grape, Inc. issued $58,000 of four-year, 8 percent bonds at 97. for each of the following situations, calculate the amount of bond discount or premium, if any

Cash Proceeds Discount or Premium a. Pear, Inc. issued $225,000 of 10-year, 8 percent bonds at 101. b. Apple, Inc. issued $133,000 of five-year, 12 percent bonds at 98. c. Cherry Co. issued $158,000 of five-year, 6 percent bonds at 102 1/4. d. Grape, Inc. issued $58,000 of four-year, 8 percent bonds at 97. for each of the following situations, calculate the amount of bond discount or premium, if any

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 17MC: Huang Inc. issued 100 bonds with a face value of $1,000 and a 5-year term at $960 each. The journal...

See similar textbooks

Similar questions

Irving Inc. sold bonds with a $50,000, 10% interest, and 10-year term at $52,000. What is the total amount of interest expense over the life of the bonds?
Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the market of interest was 9%. The company uses the effective-interest method of amortization. At the end of the year, the company will record ________. A. a credit to cash for $28,733 B. a debit to interest expense for $31,267 C. a debit to Discount on Bonds Payable for $1,267 D. a debit to Premium on Bonds Payable for $1.267
Oak Branch Inc. issued $700,000 of 5%, 10-year bonds when the market rate was 4%. They received $757,243. Interest was paid semi-annually. Prepare an amortization table for the first three years of the bonds.
Eli Inc. issued $100,000 of 8% annual, 5-year bonds for $103,000. What is the total amount of interest expense over the life of the bonds?
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?
Below is select information from two, independent companies. Additional information includes: On January 1, Company A issued a 5-year $1,500,000 bond with at 6% stated rate. Interest is paid semiannually and the bond was sold at 105.5055 to yield a market rate of 4.75%. On January 1, Company B sold $1,500,000 of common stock and paid dividends of $75,000. A. Prepare an income statement for each company (ignore taxes) B. Explain why the net income amounts are different, paying particular attention to the operational performance and financing performance of each company. (Hint: it may be helpful for you to create an amortization table).
Willoughby Inc. issued 100 bonds with a face value of $1,000 and a stated rate of 4% and received $105,000. What is the journal entry to record the sale of the bonds?
Compute the cash proceeds from bond issues under the following terms. Pear, Inc issued $171,000 of 10-year, 8 percent bonds at 103 Apple, Inc issued $71,000 of 5-year, 12 percent bonds at 98 Cherry Co. issued $153,000 of 5-year, 6 percent bonds at 101 ¼ Grape, Inc issued $61,000 of 4-year, 8 percent bonds at 98
compute the cash proceeds from bond issues under the following terms. for each case, indicate whether the bonds sold at a premium or discount Cash Proceeds Discount or Premium a. Pear, Inc. issued $225,000 of 10-year, 8 percent bonds at 101. b. Apple, Inc. issued $133,000 of five-year, 12 percent bonds at 98. c. Cherry Co. issued $158,000 of five-year, 6 percent bonds at 102 1/4. d. Grape, Inc. issued $58,000 of four-year, 8 percent bonds at 97.
On July 1, 20x3, Wenna Inc. purchased as a short-term investment a P 1,000,000 face value Keizen Co. 8% bond for P 910,000 plus accrued interest to yield 10%. The bonds mature on January 1, 20x10, pay interest annually on January 1, and are classified as Debt Investments @ Fair Value through Profit or Loss. On December 31, 20x3, the bonds had a fair value of P 945,000. On February 13, 20x4, Wenna sold the bonds for P 920,000. On July 1, 20x3, how much cash was paid by Wenna Inc. in connection with the purchase of the Debt Investments?
The following information relates to the debt securities investments of Sunland Company. 1. On February 1, the company purchased 10% bonds of Gibbons Co. having a par value of $324,000 at 100 plus accrued interest. Interest is payable April 1 and October 1. 2. On April 1, semiannual interest is received. 3. On July 1, 9% bonds of Sampson, Inc. were purchased. These bonds with a par value of $186,000 were purchased at 100 plus accrued interest. Interest dates are June 1 and December 1. 4. On September 1, bonds with a par value of $60,000, purchased on February 1, are sold at 99 plus accrued interest. 5. On October 1, semiannual interest is received. 6. On December 1, semiannual interest is received. 7. On December 31, the fair value of the bonds purchased February 1 and July 1 are 95 and 93, respectively. (a)Prepare any journal entries you consider necessary, including year-end entries (December 31), assuming these are available-for-sale securities.…
) Soap Company issued $200,000 of 8%, 5-year bonds on January 1, 20X6. The discount on issuance was $12,000. Bond interest is paid annually on December 31. On December 31, 20X8, Pumice Company purchased one-half of the outstanding bonds for $96,000. Both companies use the straight-line method of amortization. checked How much interest expense will appear on the December 31, 20X9, consolidated income statement? a. $18,400 b. $16,000 c. $9,200 d. $8,000