Consider the following independent situations: a. On March 1, 2020, Heide Co. issued at 103 plus accrued interest $3,000,000, 9% bonds. The bonds are dated January 1, 2020, and pay interest semiannually on July 1 and January 1. In addition, Heide Co. incurred $27,000 of bond issuance costs. Compute the net amount of cash received by Heide Co. as a result of the issuance of these bonds. b. On January 1, 2020, Reymont Co. issued 9% bonds with a face value of $500,000 for $469,280 to yield 10%. The bonds are dated January 1, 2020, and pay interest annually. What amount is reported as bond discount on the issue date? Prepare the journal entry to record interest expense on December 31, 2020. c. Czeslaw Building Co. has a number of long-term bonds outstanding at December 31, 2020. These long-term bonds have the following sinking fund requirements and maturities for the next 6 years. Sinking Fund Maturities 2021 $300,000 $100,000 2022 100,000 250,000 2023 100,000 100,000 2024 200,000 —00 2025 200,000 150,000 2026 200,000 100,000 Indicate how this information should be reported in the financial statements at December 31, 2020. Instructions Prepare responses for each item above.
Consider the following independent situations:
a. On March 1, 2020, Heide Co. issued at 103 plus accrued interest $3,000,000, 9% bonds. The bonds are dated January 1, 2020, and pay interest semiannually on July 1 and January 1. In addition, Heide Co. incurred $27,000 of bond issuance costs. Compute the net amount of cash received by Heide Co. as a result of the issuance of these bonds.
b. On January 1, 2020, Reymont Co. issued 9% bonds with a face value of $500,000 for $469,280 to yield 10%. The bonds are dated January 1, 2020, and pay interest annually. What amount is reported as bond discount on the issue date? Prepare the
c. Czeslaw Building Co. has a number of long-term bonds outstanding at December 31, 2020. These long-term bonds have the following sinking fund requirements and maturities for the next 6 years.
|
Sinking Fund
|
Maturities
|
|
|
2021
|
$300,000
|
$100,000
|
|
2022
|
100,000
|
250,000
|
|
2023
|
100,000
|
100,000
|
|
2024
|
200,000
|
—00
|
|
2025
|
200,000
|
150,000
|
|
2026
|
200,000
|
100,000
|
Indicate how this information should be reported in the financial statements at December 31, 2020.
Instructions
Prepare responses for each item above.
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