CHAPTER 10 HOMI X W Word Document9.doCx Chapter 1 The Fou earn.wileyplus.com/courses/36381/assignments/4943101 Crane Company issued $510,000, 10-year, 6% bonds at 103. (a) Your answer is partially correct. Prepare the journal entry to record the sale of these bonds on January 1, 2022. (Credit account t is entered. Do not indent manually.) Debit Date Account Titles and Explanation Jan. 1 Cash Bonds Payable Premium orn Bonds Payable eTextbookand Media List of Accounts Att ere to search PriSc Inses ゴー。プー F2 F8 F9 F10 F11 F12 F3 F4 F5 F6 F7

CHAPTER 10 HOMI X W Word Document9.doCx Chapter 1 The Fou earn.wileyplus.com/courses/36381/assignments/4943101 Crane Company issued $510,000, 10-year, 6% bonds at 103. (a) Your answer is partially correct. Prepare the journal entry to record the sale of these bonds on January 1, 2022. (Credit account t is entered. Do not indent manually.) Debit Date Account Titles and Explanation Jan. 1 Cash Bonds Payable Premium orn Bonds Payable eTextbookand Media List of Accounts Att ere to search PriSc Inses ゴー。プー F2 F8 F9 F10 F11 F12 F3 F4 F5 F6 F7

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 30CE: Cornerstone Exercise Debt Issued at a Premium (Straight Line) Refer to the information for Ironman...

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Bats Corporation issued 800,000 of 12% face value bonds for 851,705.70. The bonds were dated and issued on April 1, 2019, are due March 31, 2023, and pay interest semiannually on September 30 and March 31. Bats sold the bonds to yield 10%. Required: 1. Prepare a bond interest expense and premium amortization schedule using the straight-line method. 2. Prepare a bond interest expense and premium amortization schedule using the effective interest method. 3. Prepare any adjusting entries for the end of the fiscal year, December 31, 2019, using the: a. straight-line method of amortization b. effective interest method of amortization 4. Assume the company retires the bonds on June 30, 2020, at 103 plus accrued interest. Prepare the journal entries to record the bond retirement using the: a. straight-line method of amortization b. effective interest method of amortization
Wilbury Corporation issued 1 million of 13.5% bonds for 985,071.68. The bonds are dated and issued October 1, 2019, are due September 30, 2020, and pay interest semiannually on March 31 and September 30. Assume an effective yield rate of 14%. Required: 1. Prepare a bond interest expense and discount amortization schedule using the straight-line method. 2. Prepare a bond interest expense and discount amortization schedule using the effective interest method. 3. Prepare adjusting entries for the end of the fiscal year December 31, 2019, using the: a. straight-line method of amortization b. effective interest method of amortization 4. If income before interest and income taxes of 30% in 2020 is 500,000, compute net income under each alternative. 5. Assume the company retired the bonds on June 30, 2020, at 98 plus accrued interest. Prepare the journal entries to record the bond retirement using the: a. straight line method of amortization b. effective interest method of amortization 6. Compute the companys times interest earned (pretax operating income divided by interest expense) for 2020 under each alternative.
Cornerstone Exercise Debt Issued at a Premium (Straight Line) Refer to the information for Ironman Steel above. Required: Prepare the amortization table for Ironman Steels bonds(Note: Round to the nearest dollar.) Use the following information for Cornerstone Exercises 9-31 and 9-32: Sicily Corporation issued $300,000 in 5% bonds (payable on December 31, 2029) on January 1, 2020, for $257,363. Interest is paid on June 30 and December 31. The market rate of interest is 7%.
MASTERY PROBLEM Jackson, Inc.s fiscal year ends December 31. Selected transactions for the period 20-1 through 20-8 involving bonds payable issued by Jackson are as follows: 20-1 Oct. 31 Issued 600,000 of 10-year, 7%, callable bonds dated October 31, 20-1, for 612,000. Interest is payable semiannually on October 31 and April 30. The bond indenture provides that Jackson is to pay to the trustee bank 20,000 by May 15 of each year (except the tenth year) as a sinking fund for the retirement of the bonds on call or at maturity. Dec. 31 Made the adjusting entry for interest payable and amortized two months premium on the bonds (straight-line method). 20-2 Jan. 2 Reversed the adjusting entry for interest payable and bond premium amortization. Apr. 30 Paid the semiannual interest on the bonds and amortized six months premium. May 15 Paid the sinking fund trustee 20,000. Oct. 31 Paid the semiannual interest on the bonds and amortized six months premium. Dec. 31 Made the adjusting entry for interest payable and amortized two months premium on the bonds. 31 Sinking fund earnings for the year were 900. 20-8 May 15 Paid the sinking fund trustee 20,000. Oct. 31 Paid the semiannual interest on the bonds and amortized six months premium. 31 Redeemed the bonds, which were called at 97. The balance in the bond premium account is 3,600 after the payment of interest and amortization of premium have been entered. The cash balance in the sinking fund is 200,000, which is applied to the redemption. Jackson paid the sinking fund trustee the additional cash needed to pay off the bonds. (Hint: First make the entry for payment to the sinking fund, then make the entry for redemption of the bonds.) REQUIRED 1. Enter the preceding transactions in general journal form. 2. Calculate the carrying value of the bonds as of December 31, 20-2.
Entries for issuing and calling bonds; loss Adele Corp., a wholesaler of music equipment, issued 22,000,000 of 20-year, 7% callable bonds on March 1, 2016 at their face amount, with interest payable on March 1 and September 1. The fiscal year of the company is the calendar year. Journalize the entries to record the following selected transactions: 2016 Mar. 1. Issued the bonds for cash at their face amount. Sept.l. Paid the interest on the bonds. 2020 Sept.l. Called the bond issue at 102, the rate provided in the bond indenture. (Omit entry for payment of interest.)