Municipal Bank has $550,000 of 6% debenture bonds outstanding. The bonds were issued at 103 in 2021 and mature in 2041 The bonds have annual payments Read the requirements Requirement 1. How much cash did Municipal Bark receive when it issued the bond At the time the bonds were issued Munopal Bas ved cash Requirement 2. How much cash in totalwill Municipal Bank pay the bondhoides through the maturity dele of t bonds? Through the maturity date of in bonds Municipal Bar will pay the bondholders total can bonds Requirement 3. Calculate the difference between your answers to requirements 1 and 2 This ofference represents Municipal Bank's total intarest expense The difference between your answers to requirements 1 and 2 Requirement 4 Compute Municipal Bank's annual interest expense using the straight line amortization method. Multiply this amount by 20. Your 20-year total should be the same as your answer to requirement Municipal Bank's annual interest expense using the straight line anotication method is Mutiply the annual interest expense by 20 Requirements The 20-year straight-line eest tal Is your 20-year total the same as your answer to requer 37 How much cash did Municipal Bank receive tissued these bonds?

Municipal Bank has $550,000 of 6% debenture bonds outstanding. The bonds were issued at 103 in 2021 and mature in 2041 The bonds have annual payments Read the requirements Requirement 1. How much cash did Municipal Bark receive when it issued the bond At the time the bonds were issued Munopal Bas ved cash Requirement 2. How much cash in totalwill Municipal Bank pay the bondhoides through the maturity dele of t bonds? Through the maturity date of in bonds Municipal Bar will pay the bondholders total can bonds Requirement 3. Calculate the difference between your answers to requirements 1 and 2 This ofference represents Municipal Bank's total intarest expense The difference between your answers to requirements 1 and 2 Requirement 4 Compute Municipal Bank's annual interest expense using the straight line amortization method. Multiply this amount by 20. Your 20-year total should be the same as your answer to requirement Municipal Bank's annual interest expense using the straight line anotication method is Mutiply the annual interest expense by 20 Requirements The 20-year straight-line eest tal Is your 20-year total the same as your answer to requer 37 How much cash did Municipal Bank receive tissued these bonds?

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 7MCQ

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Naval Inc. issued $200,000 face value bonds at a discount and received $190,000. At the end of 2018, the balance in the Discount on Bonds Payable account is $5,000. This years balance sheet will show a net liability of ________. A. $200,000 B. $180,000 C. $195,000 D. $205,000
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
On July 1, Somerset Inc. issued $200,000 of 10%, 10-year bonds when the market rate was 12%. The bonds paid interest semi-annually. Assuming the bonds sold at 58.55, what was the selling price of the bonds? Explain why the cash received from selling this bond is different from the $200,000 face value of the bond.
On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?
Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the market of interest was 9%. The company uses the effective-interest method of amortization. At the end of the year, the company will record ________. A. a credit to cash for $28,733 B. a debit to interest expense for $31,267 C. a debit to Discount on Bonds Payable for $1,267 D. a debit to Premium on Bonds Payable for $1.267
On Jan. 1, Year 1, Foxcroft Inc. issued 100 bonds with a face value of $1,000 for $104,000. The bonds had a stated rate of 6% and paid interest semi-annually. What is the journal entry to record the first payment to the bondholders?
On Jan. 1, Year 1, Foxcroft Inc. issued 100 bonds with a face value of $1,000 for $104,000. The bonds had a stated rate of 6% and paid interest semiannually. What is the journal entry to record the issuance of the bonds?
On July 1, a company sells 8-year $250,000 bonds with a stated interest rate of 6%. If interest payments are paid annually, each interest payment will be ________. A. $120,000 B. $60,000 C. $7,500 D. $15,000