credit to Premium on Bonds Payable?
Q: What is Bond's interest income?
A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…
Q: In what ways do bonds amortize their discount and premium? Each one is explained in detail.
A: Solution concept Discount and premium bond When the coupon rate of interest is greater…
Q: How to record bonds selling at discount, premium, and at par. Why are bonds recorded at discount,…
A: Bonds are debts instruments issued by corporates. Bonds are issued at par, premium and discount.…
Q: Define bonds payable.
A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…
Q: Explain bonds issue between interest dates with examples.
A: Bonds are typically issued at interest dates in order to smoothen the flow of interest and…
Q: Under what conditions of bond issuance does a discounton bonds payable arise? Under what conditions…
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Q: ._______ The deposits are used for redeeming a bond issue.
A: Following is the answer to the question.
Q: Difference between regular bond and perpetuity bond?
A: Debt markets are markets where you contribute within the institutions or trade substances by the…
Q: How should discount on bonds payable be reported on the financial statements? Premium on bonds…
A: Concept: A premium on bonds occurs if, the bonds are issued at a high price than the face value. On…
Q: how to interpret the process of bond issuance?
A: Corporate Bond Issue: Corporate bond issuance is one method of raising capital for a company. A bond…
Q: T or F A discount on bond payable is charged to interest expense using the effective interest…
A: Effective interest method - The effective interest method is a technique used to amortize a bond…
Q: What is the principal repayment for a bond
A: There are two components principal and interest
Q: what is the required method of amortizing discount and premium on bonds payable? Explain the…
A:
Q: How are bonds reported when classified as trading securities?
A: Trading securities are those securities which are purchased or sold for trading purpose i.e. to make…
Q: Explain why bonds are issued and identify the types of bonds?
A: Bonds are one method for corporations to generate funds. The investor undertakes to contribute the…
Q: Explain face amount, discount, and premium relating to bond issuance.
A: Face value is also known as par value. Face amount of bond issuance is the amount on which coupon…
Q: What type of account is Discount on Bonds Payable, and what is its normal balance?a. Adjusting…
A:
Q: What is a bond payable?
A: Long-Term LiabilitiesLong-term liabilities are the obligations of the business that need not be paid…
Q: When accounting for a bond whose interest is included in the face amount, the account Discount in…
A: Discount in Bond payable Issue of bond which can be incurred in between face value, discount and…
Q: Bonds Payable is a type of current liabilities. True False
A: Bonds payable is a liability for the business, it means amount of bonds that the company has to…
Q: How is an interest payment on a bond calculated?
A: Bonds are debt instruments issued by corporations with a fixed interest rate(coupon rate) and…
Q: What amount of interest is expensed on a bond interest payment?
A: Whenever an interest payment is made on bonds, amount of interest expensed : Interest expensed =…
Q: How to calculate interest on bonds and how to journalize the interest.
A: Interest on bonds is computed on the basis of the rate mentioned on the bond on the face value of…
Q: shown in the image. What amount should Maine credit to premium on bonds payable?
A: Bond amount: Fair market value of the bond(Without warrant)/ Fair market value of the bond(With…
Q: What type of account is Premium on Bonds Payable? What is its normal balance? Is it added to or…
A: Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various…
Q: What is a discount bond? A premium bond?
A: Bond: Bond is a kind of debt instrument typically issued by corporations, government organizations…
Q: What are bonds classified as?
A: Issue of bonds is a source of funds of a company. They are an acknowledgement of debt taken by the…
Q: What type of account is Discount on Bonds Payable? What is its normal balance? Is it added to or…
A: Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various…
Q: how to differentiate between: premium bonds discounted bonds bonds at par?
A: Premium Bonds: A premium bond is a bond that trades in the secondary market at a price higher than…
Q: When bonds are purchased between interest dates, the accrued interest should be a. debited to the…
A: Accrued Interest It is the unpaid interest which is earned by a bondholder since last interest…
Q: What does it mean to amortize a bond premium or discount? Why is it necessary?
A: Introduction: A bond is a contract between the bond lender and the bondholders. The two most common…
Q: What are the two ways that discount and premium on bonds due are amortized? Each one should be…
A: Solution Two ways that discount and premiums on bond are amortized are as flows Straight line method…
Q: Which costs are included in bond issuance costs? How are they recorded?
A: Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing…
Q: How do we compute for the Carrying Value beginning of a Bonds Payable? of a Notes Payable? Are there…
A: The carrying value (or "book value") of the bond at a given point in time is its face value minus…
Q: Describe the process to record a bond a face value, discount value and premium?
A: Bonds payable are financial instruments. It representing a company’s commitment to pay back a…
Q: end. What should be the balance of the Fair on Bonds Payable? Show Value Adjustment your work.
A: Bonds payable is the payable of the bonds which has been issued by the company and which is the…
Q: a) What are the important bond features. Describe each feature what they indicate. What are Discount…
A: Hi student Since there are multiple questions, we will answer only first question.
Q: a. What is the discount or premium from the issuance of the bonds payable? Indicate whether…
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Q: What are the reasons that some bonds are issued at adiscount and others are issued at a premium?
A: The term premium and discount, which are used in context of bones, they usually tells that how the…
Q: Discount on Bonds Payable account
A: Discount on Bonds Payable account is deducted from outstanding liability of Bonds Payable in order…
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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 amortizationOn July 2, 2018, McGraw Corporation issued 500,000 of convertible bonds. Each 1,000 bond could be converted into 20 shares of the companys 5 par value stock. On July 3, 2020, when the bonds had an unamortized discount of 7,400 and the market value of the McGraw shares was 52 per share, all the bonds were converted into common stock. Required: 1. Prepare the journal entry to record the conversion of the bonds under (a) the book value method and (b) the market value method. 2. Compute the companys debt-to-equity ratio (total liabilities divided by total shareholders equity, as described in Chapter 6) under each alternative. Assume the companys other liabilities are 2 million and shareholders equity before the conversion is 3 million. 3. Assume the company uses IFRS and issued the bonds for 487,500 on July 2, 2018. On this date, it determined that the fair value of each bond was 930 and the fair value of the conversion option was 45 per bond. Prepare the journal entry to record the issuance of the bonds.On January 1, 2019, Brewster Company issued 2,000 of its 5-year, 1,000 face value, 11% bonds dated January 1 at an effective annual interest rate (yield) of 9%. Brewster uses the effective interest method of amortization. On December 31, 2023, Brewster extinguished the 2,000 bonds early through acquisition in the open market for 1,980,000. On July 1, 2022, Brewster issued 5,000 of its 6-year, 1,000 face value, 10% convertible bonds dated July 1 at an effective annual interest rate (yield) of 12%. The bonds are convertible at the option of the investor into Brewsters common stock at a ratio of 10 shares of common stock for each bond. Brewster uses the effective interest method of amortization. On July 1, 2023, an investor in Brewsters convertible bonds tendered 1,500 bonds for conversion into 15,000 shares of Brewsters common stock, which had a market value of 105 per share at the date of the conversion. Required: 1. Using the information about Brewster, answer the following questions: a. Were the 11% bonds issued at par, at a discount, or at a premium? Why? b. Is the amount of interest expense for the 11% bonds using the effective interest method of amortization higher in the first or second year of the life of the bond issue? Why? 2. Using the information about Brewster, explain the following: a. How is a gain or loss on early extinguishment of debt determined? Does the early extinguishment of the 11% bonds result in a gain or loss? Why? b. How does Brewster report the early extinguishment of the 11% bonds on the 2023 income statement? 3. Based on the information provided about Brewster, answer the following questions: a. Does recording the conversion of the 10% convertible bonds into common stock under the book value method affect net income? What is the rationale for the book value method? b. Does recording the conversion of the 10% convertible bonds into common stock under the market value method affect net income? What is the rationale for the market value method?