On January 1, 2016, Knorr Corporation issued $1,100,000 of 9%, 5-year bonds dated January 1, 2016. The bonds pay interest annually on December 31. The bonds were issued to yield 10%. Bond issue costs associated with the bonds totaled $20,058.17. Required:   Prepare the journal entries to record the following:   January 1, 2016 Sold the bonds at an effective rate of 10% December 31, 2016 First interest payment using the effective interest method December 31, 2016 Amortization of bond issue costs using the straight-line method December 31, 2017 Second interest payment using the effective interest method December 31, 2017 Amortization of bond issue costs using the straight-line method

Q: ry 1, 2016, Truffle Corp. issued 9% bonds in the face amount of P 5,000,000, which maature on…

A: Solution: Under interest method of bond amortization, Discount amortized is difference between cash…

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Q: Baron, Inc., issued $100,000 of its 8%, five-year bonds on January 1, 2016, at 98. Interest is paid…

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Q: On January 1, 2016, Tonika Company issued a four-year, $10,000, 7% bond. The interest is payable…

A: The bonds are issued at discount when market rate is higher than the stated rate of interest.

Q: On January 1, 2017, Babb Trailers, Inc. issued $6,500,000 of par value bonds for $6,200,000. The…

A: Total discount on issue of bonds = Face value of bonds - Issue value = $6,500,000 - $6,200,000 =…

Q: Foreman Company issued $800,000 of 10%, 20-year bonds on January 1, 2017, at 84.95 to yield 12%.…

A: a. Date Account Title and Explanation Debit Credit 1-Jan Cash ($800,000*119.792%) $958,336…

Q: $939,000 to yield 10%. Alquds uses the effective-interest method of amortizing bond discount.…

A: Un amortized bond discount ,7/1/ Year 1   Bond discount amortization ,7/1/ Year 1 to  6/30/Year3:…

Q: On July 1, 2010, Remington Chemical Company issued $4,000,000 face value, 10%, and 10-year bonds at…

A: Balance Sheet         Liabilities         Bonds Payable 4000000       Premium on Bonds Payable…

Q: On January 1 2017, Aumont Company sold 12% bonds having a maturity value of $500,000 for…

A: Prepare the journal entry to record the interest payment and the amortization for 2019.

Q: On November 1, 2016, Melissa Corp. issued P 800,000 of its 10- year,8% term bonds dated October 1,…

A: Bonds are units of corporate debt issued by companies and securitized as tradeable assets.     Given…

Q: On January 1, 2017, Babb Trailers, Inc. issued $6,500,000 of par value bonds for $6,200,000. The…

A: Solution:- The amount of interest expense recognized by Babb Trailers, Inc. on the bond issue for…

Q: On December 31, 2017, Evermore's Inc 's long-term obligation portion includes USD3,000,000 in 5-year…

A: Valuation of Bond

Q: On January 1, 2016, Knorr Corporation issued $1,000,000 of 9%, 5-year bonds dated January 1, 2016.…

A: The question is based on the concept of Financial Accounting.

Q: On January 1, 2016, Knorr Corporation issued $1,400,000 of 6%, 5-year bonds dated January 1, 2016.…

A: The initial measurement of the bonds shall be made at fair value. Fair value = Present value of cash…

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A: First step is to compute the total discount on the issue of bonds on jan 2012.This will be computed…

Q: Sylvestor Company issues 9%, five-year bonds, on December 31, 2016, with a par value of $180,000 and…

A: Given that, Par value of bonds issued = $180000 Interest is payable on June 30 and Dec 31. Rate of…

Q: On January 1, 2016, Bonita Industries issued $4,000,000 of its 10% stated rate bonds for $4,475,661…

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Q: On January 1, 2016, Blue Company issued ten-year bonds with a face value of P 1,000,000 and a stated…

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A: If the bonds are issued at price less than the face value then it is said to be issued at discount.

Q: On November 1, 2015, Davis Company issued a $30,000, 10-year, 7% bonds for $29,100. Interest is…

A: Total discount on bonds = Face value of bonds - issue value of bonds =  $30,000 - $29,100 = $900

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A: Payment of interest = Face value of bonds x rate of interest x time = $600,000 x 5% = $30,000 Total…

Q: On January 1, 2017, JWS Corporation issued $600,000 of 7% bonds, due in 10 years. The bonds were…

A:

Q: On June 30, 2016, King Co. had outstanding 9%, $5,000,000 face value bonds maturing on June 30,…

A: A bond is a fixed pay instrument issued to represent to an advance made by a financial specialist to…

Q: Foreman Company issued $800,000 of 10%, 20-year bonds on January 1, 2017, at 119.792 to yield 8%.…

A: Requirement a:   Pass necessary journal entry to record issue of bonds at premium.

Q: Ajax issued $2,500,000 in bonds on January 1, 2014 at a stated rate of 4% and a yield of 5%.…

A: Issue Price of the bonds = Present value of principal + Present value of interest payments = face…

Q: On February 1, 2016, Strauss-Lombardi issued 9% bonds, dated February 1, with a face amount of…

A: 1.

Q: On January 1, 2017, Ellison Co. issued eight-year bonds with a far value of S6,000,000 and a stated…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

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Q: Stafford Co. Issued $200,000 face value, 6%, 10-year bonds on January 1, 2017 for $172,740.  The…

A: a. Compute the amount of interest expense to be recorded with the first cash interest payment:…

Q: On March 1, 2016, Stratford Lighting issued 14% bonds, dated March 1, with a face amount of…

A: Step 1: Record the journal entry for issuance of bonds on March 1, 2016:

Q: Pharoah Company issued $2,400,000 of 10%, 10-year bonds on January 1, 2017, at 104. Interest is…

A: As bonds are issued at premium, it means that bonds are sold at the amount that is greater than…

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A: a). Face value of bond = $2,400,000 (24,000 bonds)                                   = $120,000…

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A: Lets understand the basics. There are two method for amortizing bond premium/discount which are, (1)…

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A:

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A: Annual interest payment = face value of bonds x rate of interest x no. of months/12 = P4,000,000 x…

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A: In this question, we have required to pass the journal entry of issue of the bond issue and the…

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A: