On January 1, 2020, Hut Co. Itd sold sh.1, 000.000 of its 10% bonds for sh.885. 296 to yield 12%. Interest is payable semiannually on January 1 and July 1. What amount should Huff report as interest expense for the six months ended June 30. 20207 Select one: A. d. sh.60. 000 B. b. sh.50. 000 C.C. sh.53. 118 D. a. sh.44, 266
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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 October 1 a company sells a 3-year, $2,500,000 bond with an 8% stated interest rate. Interest is paid quarterly and the bond is sold at 89.35. On October 1 the company would collect ________. A. $200,000 B. $558,438 C. $2,233,750 D. $6,701,250Wilbury 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.
- PB6. LO 13.3Edward 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 semiannually. The discount is amortized using the straight-line method. Prepare journal entries for the following transactions. July 1, 2018: entry to record issuing the bonds Dec. 31, 2018: entry to record payment of interest to bondholders Dec. 31, 2018: entry to record amortization of discountE17.3 (LO 1) (Entries for Held-to-Maturity Securities) On January 1, 2020, Hi and Lois Company purchased 12% bonds having a maturity value of $300,000 for $322,744.44. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Hi and Lois Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category. Instructions a. Prepare the journal entry at the date of the bond purchase. b. Prepare a bond amortization schedule. c. Prepare the journal entry to record the interest revenue and the amortization at December 31, 2020. d. Prepare the journal entry to record the interest revenue and the amortization at December 31, 2021. E17.4 (LO 1) (Entries for Available-for-Sale Securities) Assume the same information as in E17.3 except that the securities are classified as available-for-sale. The fair value of the…6. [HW] $100,000 bond redeemable at par on October 1, 2038, is purchased on January 15, 2017. Interest is 5.9% payable semi-annually and the yield is 9% compounded semi-annually. a) What is the cash price of the bond? b) What is the accrued interest? c) What is the purchase price? SDT = CPN = RDT = RV = ACT 2/Y YLD = PRI = AI = a) $70,634.65 b) $1718.13 c) 72,352.78
- PB5. LO 13.3Dixon 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. July 1, 2018: entry to record issuing the bonds June 30, 2019: entry to record payment of interest to bondholders June 30, 2019: entry to record amortization of discount June 30, 2020: entry to record payment of interest to bondholders June 30, 2020: entry to record amortization of discountBE11.1 (LO 2) Meera Ltd. issued 4,000, 8%, 5-year, £1,000 bonds dated January 1, 2020, at 100. Interest is paid each January 1. Prepare the journal entry to record the sale of these bonds on January 1, 2020. Prepare the adjusting journal entry on December 31, 2020, to record interest expense. Prepare the journal entry on January 1, 2021, to record interest paid.January 1, 2021, Marceline the Vampire Queen Co. purchased P1,000,000 10% bonds classified atamortized cost. The bonds were purchased to yield 12%. Interest is payable annually every December 31.The bonds mature on December 31, 2025. On December 31, 2021, the bonds were selling at 99. OnJanuary 2, 2023, Marceline the Vampire Queen Co. sold P500,000 face value bonds at 101. The bondswere selling at 103 on December 31, 2023. Based on the above and the result of your audit, answer thefollowing: Present value of 1 for 3 periods at 12%: 0.635518078 Present value of an annuity of 1 for 10 periods at 12%: 3.037349347 3. How much is the gain/loss on sale on January 2, 2023?
- January 1, 2021, Marceline the Vampire Queen Co. purchased P1,000,000 10% bonds classified atamortized cost. The bonds were purchased to yield 12%. Interest is payable annually every December 31.The bonds mature on December 31, 2025. On December 31, 2021, the bonds were selling at 99. OnJanuary 2, 2023, Marceline the Vampire Queen Co. sold P500,000 face value bonds at 101. The bondswere selling at 103 on December 31, 2023. Based on the above and the result of your audit, answer thefollowing: Present value of 1 for 3 periods at 12%: 0.635518078 Present value of an annuity of 1 for 10 periods at 12%: 3.037349347 3. How much is the gain/loss on sale on January 2, 2023? 4. How much is the interest income on December 31, 2023? 5. How much is the discount amortization on December 31, 2022?January 1, 2021, Marceline the Vampire Queen Co. purchased P1,000,000 10% bonds classified atamortized cost. The bonds were purchased to yield 12%. Interest is payable annually every December 31.The bonds mature on December 31, 2025. On December 31, 2021, the bonds were selling at 99. OnJanuary 2, 2023, Marceline the Vampire Queen Co. sold P500,000 face value bonds at 101. The bondswere selling at 103 on December 31, 2023. Based on the above and the result of your audit, answer thefollowing: Present value of 1 for 3 periods at 12%: 0.635518078 Present value of an annuity of 1 for 10 periods at 12%: 3.037349347 2. The carrying amount of the investment in bonds on December 31, 2021 is ?January 1, 2021, Marceline the Vampire Queen Co. purchased P1,000,000 10% bonds classified atamortized cost. The bonds were purchased to yield 12%. Interest is payable annually every December 31.The bonds mature on December 31, 2025. On December 31, 2021, the bonds were selling at 99. OnJanuary 2, 2023, Marceline the Vampire Queen Co. sold P500,000 face value bonds at 101. The bondswere selling at 103 on December 31, 2023. Based on the above and the result of your audit, answer thefollowing: Present value of 1 for 3 periods at 12%: 0.635518078 Present value of an annuity of 1 for 10 periods at 12%: 3.037349347 3. How much is the gain/loss on sale on January 2, 2023? 4. How much is the interest income on December 31, 2023? 5. How much is the discount amortization on December 31, 2022? Date Nominal Interest Effective Interest Amortization Carrying Amount 1/1/2021 12/31/2021 12/31/2022 1/2/2023 12/31/2023 12/31/2024…