Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Chin Company issued $19,500,000 of five-year, 6% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 8%, resulting in Chin Company receiving cash of $17,918,297. a. Journalize the entries to record the following: Issuance of the bonds. First semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) Second semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) For a compound transaction, if an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar. 1. fill in the blank d740c1f88063034_2 fill in the blank d740c1f88063034_3 fill in the blank d740c1f88063034_5 fill in the blank d740c1f88063034_6 fill in the blank d740c1f88063034_8 fill in the blank d740c1f88063034_9 2. fill in the blank d740c1f88063034_11 fill in the blank d740c1f88063034_12 fill in the blank d740c1f88063034_14 fill in the blank d740c1f88063034_15 fill in the blank d740c1f88063034_17 fill in the blank d740c1f88063034_18 3. fill in the blank d740c1f88063034_20 fill in the blank d740c1f88063034_21 fill in the blank d740c1f88063034_23 fill in the blank d740c1f88063034_24 fill in the blank d740c1f88063034_26 fill in the blank d740c1f88063034_27 b. Determine the amount of the bond interest expense for the first year. $fill in the blank dcc71505b04ffed_1 c. Why was the company able to issue the bonds for only $17,918,297 rather than for the face amount of $19,500,000? The market rate of interest is the contract rate of interest.

Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Chin Company issued $19,500,000 of five-year, 6% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 8%, resulting in Chin Company receiving cash of $17,918,297. a. Journalize the entries to record the following: Issuance of the bonds. First semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) Second semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) For a compound transaction, if an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar. 1. fill in the blank d740c1f88063034_2 fill in the blank d740c1f88063034_3 fill in the blank d740c1f88063034_5 fill in the blank d740c1f88063034_6 fill in the blank d740c1f88063034_8 fill in the blank d740c1f88063034_9 2. fill in the blank d740c1f88063034_11 fill in the blank d740c1f88063034_12 fill in the blank d740c1f88063034_14 fill in the blank d740c1f88063034_15 fill in the blank d740c1f88063034_17 fill in the blank d740c1f88063034_18 3. fill in the blank d740c1f88063034_20 fill in the blank d740c1f88063034_21 fill in the blank d740c1f88063034_23 fill in the blank d740c1f88063034_24 fill in the blank d740c1f88063034_26 fill in the blank d740c1f88063034_27 b. Determine the amount of the bond interest expense for the first year. $fill in the blank dcc71505b04ffed_1 c. Why was the company able to issue the bonds for only $17,918,297 rather than for the face amount of $19,500,000? The market rate of interest is the contract rate of interest.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 5PB: Dixon Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...

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Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method

On the first day of its fiscal year, Chin Company issued $19,500,000 of five-year, 6% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 8%, resulting in Chin Company receiving cash of $17,918,297.

a. Journalize the entries to record the following:

Issuance of the bonds.
First semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.)
Second semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.)

For a compound transaction, if an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar.

1.	fill in the blank d740c1f88063034_2	fill in the blank d740c1f88063034_3
	fill in the blank d740c1f88063034_5	fill in the blank d740c1f88063034_6
	fill in the blank d740c1f88063034_8	fill in the blank d740c1f88063034_9
2.	fill in the blank d740c1f88063034_11	fill in the blank d740c1f88063034_12
	fill in the blank d740c1f88063034_14	fill in the blank d740c1f88063034_15
	fill in the blank d740c1f88063034_17	fill in the blank d740c1f88063034_18
3.	fill in the blank d740c1f88063034_20	fill in the blank d740c1f88063034_21
	fill in the blank d740c1f88063034_23	fill in the blank d740c1f88063034_24
	fill in the blank d740c1f88063034_26	fill in the blank d740c1f88063034_27

b. Determine the amount of the bond interest expense for the first year.
$fill in the blank dcc71505b04ffed_1

c. Why was the company able to issue the bonds for only $17,918,297 rather than for the face amount of $19,500,000?
The market rate of interest is the contract rate of interest.

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