On January 1, 2024, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: Payment Cash Payment Effective Interest Increase in Balance Outstanding Balance 6,286,574 1 370,000 377,194 7,194 6,293,768 2 370,000 377,626 7,626 6,301,394 3 370,000 378,084 8,084 6,309,478 4 370,000 378,569 8,569 6,318,047 5 370,000 379,083 9,083 6,327,130 6 370,000 379,628 9,628 6,336,758 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 38 370,000 432,132 62,132 7,264,327 39 370,000 435,860 65,860 7,330,187 40 370,000 439,813 69,813 7,400,000 Required: What is the face amount of the bonds? What is the initial selling price of the bonds? answer = $6,286,574 What is the term to maturity in years? answer = 20 years Interest is determined by what approach? answer = Effective interest rate What is the stated annual interest rate? What is the effective annual interest rate? answer = 12% What is the total cash interest paid over the term to maturity? What is the total effective interest expense recorded over the term to maturity? Questions 2, 3, 4, and 6 have been answered.
On January 1, 2024, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: Payment Cash Payment Effective Interest Increase in Balance Outstanding Balance 6,286,574 1 370,000 377,194 7,194 6,293,768 2 370,000 377,626 7,626 6,301,394 3 370,000 378,084 8,084 6,309,478 4 370,000 378,569 8,569 6,318,047 5 370,000 379,083 9,083 6,327,130 6 370,000 379,628 9,628 6,336,758 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 38 370,000 432,132 62,132 7,264,327 39 370,000 435,860 65,860 7,330,187 40 370,000 439,813 69,813 7,400,000 Required: What is the face amount of the bonds? What is the initial selling price of the bonds? answer = $6,286,574 What is the term to maturity in years? answer = 20 years Interest is determined by what approach? answer = Effective interest rate What is the stated annual interest rate? What is the effective annual interest rate? answer = 12% What is the total cash interest paid over the term to maturity? What is the total effective interest expense recorded over the term to maturity? Questions 2, 3, 4, and 6 have been answered.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 5P: Bats Corporation issued 800,000 of 12% face value bonds for 851,705.70. The bonds were dated and...
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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On January 1, 2024, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below:
| Payment | Cash Payment | Effective Interest | Increase in Balance | Outstanding Balance |
|---|---|---|---|---|
| 6,286,574 | ||||
| 1 | 370,000 | 377,194 | 7,194 | 6,293,768 |
| 2 | 370,000 | 377,626 | 7,626 | 6,301,394 |
| 3 | 370,000 | 378,084 | 8,084 | 6,309,478 |
| 4 | 370,000 | 378,569 | 8,569 | 6,318,047 |
| 5 | 370,000 | 379,083 | 9,083 | 6,327,130 |
| 6 | 370,000 | 379,628 | 9,628 | 6,336,758 |
| ~ | ~ | ~ | ~ | ~ |
| ~ | ~ | ~ | ~ | ~ |
| ~ | ~ | ~ | ~ | ~ |
| 38 | 370,000 | 432,132 | 62,132 | 7,264,327 |
| 39 | 370,000 | 435,860 | 65,860 | 7,330,187 |
| 40 | 370,000 | 439,813 | 69,813 | 7,400,000 |
Required:
- What is the face amount of the bonds?
- What is the initial selling price of the bonds? answer = $6,286,574
- What is the term to maturity in years? answer = 20 years
- Interest is determined by what approach? answer = Effective interest rate
- What is the stated annual interest rate?
- What is the effective annual interest rate? answer = 12%
- What is the total cash interest paid over the term to maturity?
- What is the total effective interest expense recorded over the term to maturity?
Questions 2, 3, 4, and 6 have been answered.
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