E-Tech Initiatives Limited plans to issue $630,000, 10-year, 6.00 percent bonds. Interest is payable annually on December 31. All of the bonds will be issued on January 1, 2019. Show how the bonds would be reported on the January 2, 2019, balance sheet if they are issued at 103. E-TECH INITIATIVES LIMITED Balance Sheet (partial) As of January 2, 2019 Carrying Value 0
Q: On January 2, 2016, Banno Corp. issued P1,500,000 of 10% bonds to yield 11% due December 31, 2025.…
A: The answer is stated below:
Q: E-Tech Initiatives Limited plans to issue $450,000, 10-year, 5 percent bonds. Interest is payable…
A: Formula: Discount amount = Bond value x Discount rate
Q: On June 1. 2020. Mitchell Inc. issued 100, 8%, $1,000 bonds dated June 1, 2020 for $108,530. The…
A: The face value of a bond is 100000 and it is issued at 108530. The premium on the issue of bond is…
Q: On January 1, 2019, Drennen Inc. issued $5 million face amount of 10-year, 14% stated rate bonds…
A: Given: Face value= $5,000,000 i (Stated interest rate) = 14% n (Time period)= 10 x 2 = 20 Market…
Q: On January 1, 2019, Fri Company issued P4,000,000 maturity value, 12% bonds for P4,000,000 cash. The…
A: Accrued interest payable is one of the liability of the business, which needs to be paid or settled.…
Q: Marbel Company was authorized to issue 12% bonds payable with face amount of P5,000,000 on April…
A: Bonds are those units that are issued by the companies and securitized as tradeable assets. It is a…
Q: E-Tech Initiatives Limited plans to issue $450,000, 10-year, 5 percent bonds. Interest is payable…
A: please like the answer your response matters Long term Liabilities: Bonds Payable $450,000…
Q: 1. On March 1, 2019, Company B issued $1,000,000, 10 years, 12% bonds at 103 excluding accrued…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Polk Incorporated issued $242,000 of 7% bonds on July 1, 2019, for $251,421.19. The bonds were dated…
A: Given, Face value = $242,000 Issue price = $251,421.19 Coupon rate = 7%/2 = 3.5% Market rate = 6%/2…
Q: On December 31, 2019, Potter Corporation issued €2,000,000, 6%, 5-year bonds for €1,840,324. The…
A: The bonds are issued at discount when market rate is higher than the coupon rate of bonds payable.
Q: On January 1, 2019, Tonika Company issued a five-year, $10,000, 8% bond. The interest is payable…
A: Book value: An asset's book value is equal to its carrying value on the balance sheet, and…
Q: on april 1, 2019 franville corporation issued, at 98 plus accrued interest, 400 of its 105, $1000…
A: Number of bonds = 400 Face value of bonds = $1,000 The bonds issued at a 98% discount Interest on…
Q: Jordan Company issues €50,000,000, 7.8%, 20-year bonds to yield 8% on July 1, 2018. Interest is paid…
A: Bonds are the debt security which is offered or issued by the corporates or the government to…
Q: 1. On March 1, 2019, Company B issued $1,000,000, 10 years, 12% bonds at 103 excluding accrued…
A: Selling price is the price at which a commodity is sold. It includes the cost incurred for the…
Q: Sheffield Corp. issued 2,100, 6%, 5-year, $1,000 bonds dated January 1, 2019, at 100. Interest is…
A: Bonds payable are one of the sources of finance and are shown as liability. If the interest rate is…
Q: E-Tech Initiatives Limited plans to issue $500,000, 10-year, 4 percent bonds. Interest is payable…
A: Number of bonds=Total valuePar value=$500,000$100=5,000
Q: N. Chocolate Company was authorized to issue 12% bonds with face amount of P5,000,000 on April 1,…
A: Solution: Net cash received from issuance of bond = Proceed from issue of Bond - bond issue cost
Q: Windsor, Inc. has issued three different bonds during 2019. Interest is payable annually on each of…
A: Bonds payable are one of the sources of finance and are shown as liability. If the interest rate is…
Q: On January 1, 2019, Asus Company issued P4,000,000 maturity value, 12% bonds for P4,000,000 cash.…
A: Accrued interest payable = Face value × coupon rate
Q: On December 31, 2018, Interlink Communications issued 6% stated rate bonds with a face amount of…
A: Interest payment = Face value of bonds x rate of interest x time = $100 million x 6% = $6 million
Q: On Dec. 31, 2020, Zallag company issues callable bonds that havea $700,000 par value, mature in 10…
A: Bonds are the amount company borrowed from the investors for a fixed income and for a period of…
Q: On January 1, 2019, Learned Inc. issued $105 million face amount of 20-year, 14% stated rate bonds…
A:
Q: On May 1, 2021, Ligertwood Co. issued P5,000,000, 10%, three-year bonds to yield 8%. The bonds pay…
A: Bond is a debt security which carries a fixed interest rate. The fixed interest rate is known as…
Q: Potter Corporation issued $500,000 of 5%, 12-year bonds payable on March 31, 2019. The market…
A: Answer 1 Face value of the bond is $5,00,000 however same has been issued at discount. If coupon…
Q: At the beginning of this year, MM purchased P6,000,000, 9% face amount bonds. The interest is…
A: For calculating the issue price of bonds , we need to calculate the present value of future cash…
Q: Hillside issues $4,000,000 of 6%, 15-year bonds dated January 1, 2019, that pay interest…
A: Please note: Since you have posted a question with multiple sub-part, we will solve the first three…
Q: On June 1, 2019, Vape Inc. issued P12,000,000 of 10% bonds to yield 12% effective rate. Interest is…
A: The carrying value of a bond is the the net amount between the bond's face value plus any…
Q: On January 1, 2021, White Water issues $600,000 of 7% bonds, due in 10 years, with interest payable…
A: Annual interest payment = Face value of bonds x rate of interest x time = $600,000 x 7% x 1 year =…
Q: E-Tech Initiatives Limited plans to issue $500,000, 10-year, 4 percent bonds. Interest is payable…
A: E-Tech Initiatives limited Balance Sheet (partial) As of January 2,2019 Long term Liabilities…
Q: On January 1, 2019, Knorr Corporation issued $1,000,000 of 9%, 5-year bonds dated January 1, 2019.…
A: A bond refers to the instrument which is issued by the government to borrow money when needed. It is…
Q: On January 1, 2021, HBB Company was authorized to issue 12% bonds with a face amount of ₱5,000,000.…
A: A journal entry is a sort of accounting entry used to record a business transaction in the…
Q: E-Tech Initiatives Limited plans to issue $650,000, 10-year, 7.00 percent bonds. Interest is payable…
A: Journal entry to record Issuance of bonds payable:
Q: On January 1, 2019, Whitmore Corp Issues $600,000 of 9% 15 year bonds that annually on December 31st…
A: Bonds are considered a financial instrument used to raise finance for the organization. It is also…
Q: E-Tech Initiatives Limited plans to issue $550,000, 10-year, 3 percent bonds. Interest is payable…
A: Concept Introduction:Bonds: Bonds are debt instruments issued by the borrower company to its…
Q: . Compute for the issue price of the bonds on January 1, 2019. 2. Compute for the bonds outstanding…
A: 1. There was no need of interest calculation. So, it's ignored. 2. Bonds are retired before…
Q: The Colson Company issued $300,000 of 10% bonds on January 1, 2020. The bonds are due January 1,…
A: Step 1: a. Journal entry for the issuance of bonds: The above entry is recorded for the issuance of…
Q: Blue Corporation issued a 10 year bonds on January 1, 2019. Costs associated with the bond issuance…
A: Amount amortize on December 31, 2019 = Total bonds issue cost / Bonds duration in year = P1,…
Q: At the beginning of this year, MM purchased P6,000,000, 9% face amount bonds. The interest is…
A: Bond interest : P 6,000,000 x 0.09 = P 540,000 per year Every year the total payment of Bond…
Q: BMT Company issued P5,000,000, 12%, 20-year bonds at 102 plus accrued interest on February 1, 2021.…
A: Accrued interest on the bonds company collect from the investor on February 1, 2021 = Face value of…
Q: Spiller Corp. plans to issue 6%, 9-year, $550,000 par value bonds payable that pay interest…
A: Number of periods = 9*2 Number of periods = 18 Market rate = 4%/2 Market rate = 2% Coupon rate =…
Q: Determining the Proceeds from Bond Issues Madison Corporation is authorized to issue $400,000 of…
A: Introduction: The bonds to yield % is the amount of return the bonds will payback on maturity. The…
Q: On January 1, 2019, Legion Company sold OMR 50,000 of 10% ten-year bonds. Interest is payable…
A: Formulas: Interest expense = Issue price * Yield
Q: On January 1, 2019, Drennen Inc. issued $5 million face amount of 10-year, 14% stated rate bonds…
A:
Q: On May 1, 2019, Ramden Company issues 13% bonds with a face value of $2 million. The bond contract…
A:
Q: On January 1, 2019, Tara Company issued a 10% bonds payable in the face amount of P6,000,000. The…
A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: On April 1, 2019, Ellison Co. issued 4-year, 7%, $100,000 face value bonds. The bonds were issued at…
A:
Q: Bonita Industries issues $30900000 of 10-year, 7% bonds on March 1, 2020, at 96 plus accrued…
A: Bond prices are expressed as a percentage of par:- Price of 100 means that a bond costs 100 percent…
Q: Green Corporation issued a P4, 000,000 of 6% bonds on May 1, 2019. The bonds were dated January 1,…
A: Accrued interest refers to the interest amount that has been incurred but has not yet paid out.…
Q: Spiller Corp. plans to issue 10%, 15-year, $500,000 par value bonds payable that pay interest…
A: Face Value of Bond = $500000 Coupon Rate = 10% per annum Coupon Amountfor 6 months = 500000*10% /2 =…
Q: E-Tech Initiatives Limited plans to issue $530,000, 10-year, 4 percent bonds. Interest is payable…
A: Bonds payable are one of the sources of finance and are shown as liability. If the interest rate is…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- 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.Disclosure of Debt On May 1, 2019, Ramden Company issues 13% bonds with a face value of 2 million. The bond contract calls for retirement of the bonds in periodic installments of 200,000, starting on May 1, 2020, and continuing on each May 1 thereafter until all bonds are retired. Required: How would the preceding information appear in Ramdens balance sheets on December 31, 2019, and 2020?Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $540,000. Interest is payable annually. The premium is amortized using the straightline method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. June 30, 2019: entry to record payment of interest to bondholders C. June 30, 2019: entry to record amortization of premium D. June 30, 2020: entry to record payment of interest to bondholders E. June 30, 2020: entry to record amortization of premium
- Short-Term Debt Expected to Be Refinanced On December 31, 2019, Excello Electric Company had 1 million of short-term notes payable due February 7, 2020. Excello expected to refinance these notes on a long-term basis. On January 15, 2020, the company issued bonds with a face value of 900,000 for 882,000. On January 22, 2020, the proceeds from the bond issue plus additional cash held by Excello on December 31, 2019, were used to liquidate the 1 million of short-term notes. The December 31, 2019, balance sheet is issued on February 12, 2020. Required: Prepare a partial balance sheet as of December 31, 2019, showing how the 1 million of short-term notes payable should be disclosed. Include an appropriate footnote for proper disclosure.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 amortizationDixon Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $480,000. Interest is payable annually. The discount is amortized using the straight-line method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. June 30, 2019: entry to record payment of interest to bondholders C. June 30, 2019: entry to record amortization of discount D. June 30, 2020: entry to record payment of interest to bondholders E. June 30, 2020: entry to record amortization of discount
- Cornerstone Exercise Bonds Issued at a Discount (Effective Interest) Refer to the information for Sicily Corporation above. Required: Prepare the journal entries for December 31, 2020 and 2021. Use the following information for Cornerstone Exercises 9-33 and 9-34: Crafty Corporation issued 5475,000 of 5%, 7-year bonds on January 1, 2020, for $448,484. Interest is paid annually on December 31. The market rate of interest is 6%.Aggies Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018, and received $540,000. Interest is payable semi-annually. The premium is amortized using the straight-line method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. Dec. 31, 2018: entry to record payment of interest to bondholders C. Dec. 31, 2018: entry to record amortization of premium