Acc On June 1, 2023, JetCom Inventors Inc. issued a $640,000 9%, three-year bond. Interest is to be paidsemiannually beginning December 1, 2023.Required:a. Calculate the issue price of the bond assuming a market interest rate of 10%. (Do not round intermediatecalculations. Round the final answer to the nearest whole dollar.)Issue price of the bondPeriodEndingb. Using the effective interest method, prepare an amortization schedule. (Do not round intermediatecalculations. Round the final answers to the nearest whole dollar. Enter all the amounts as positive values.)June 1/23Dec. 1/23June 1/24Dec 1/21CashInterest Paidive & ExitPeriod Interest DiscountAmort.ExpenseUnamortizedDiscountCarryingValueSubmi> b. Using the effective interest method, prepare an amortization schedule. (Do not round intermediatecalculations. Round the final answers to the nearest whole dollar. Enter all the amounts as positive values.)PeriodEndingJune 1/23Dec. 1/23June 1/24Dec. 1/24June 1/25Dec. 1/25June 1/26TotalsCashInterest Paid$Period Interest DiscountExpenseAmort.0 $0 $0UnamortizedDiscount0CarryingValue0

The bonds are the debt instrument that the government or corporations issue to raise money. The…

On June 1, 2023, JetCom Inventors Inc. issued a $640,000 9%, three-year bond. Interest is to be paid semiannually beginning December 1, 2023. Required: a. Calculate the issue price of the bond assuming a market interest rate of 10%. (Do not round intermediate calculations. Round the final answer to the nearest whole dollar.) Issue price of the bond

On June 1, 2023, JetCom Inventors Inc. issued a $640,000 9%, three-year bond. Interest is to be paid semiannually beginning December 1, 2023. Required: a. Calculate the issue price of the bond assuming a market interest rate of 10%. (Do not round intermediate calculations. Round the final answer to the nearest whole dollar.) Issue price of the bond

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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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.
Smashing Cantaloupes Inc. issued 5-year bonds with a par value of $35,000 and an 8% semiannual coupon (payable June 30 and December 31) on January 1, 2018, when the market rate of interest was 10%. Were the bonds issued at a discount or premium? Assuming the bonds sold at 92.288, what was the sales price of the bonds?
Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market rate of 4%. The bonds paid interest semi-annually on June 30 and Dec. 31. How much money did the company receive when the bonds were issued? The bonds would be quoted at what rate?
Issue Price The following terms relate to independent bond issues: 500 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments 500 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments 800 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments 2,000 bonds; $500 face value; 12% stated rate; 15 years; semiannual interest payments Required Assuming the market rate of interest is 10%, calculate the selling price for each bond issue.
Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the market rate was 6%. Interest was paid semi-annually. Calculate and explain the timing of the cash flows the purchaser of the bonds (the investor) will receive throughout the bond term. Would an investor be willing to pay more or less than face value for this bond?
On January 1, a company issued a 5-year $100,000 bond at 6%. Interest payments on the bond of $6,000 are to be made annually. If the company received proceeds of $112,300, how would the bonds issuance be quoted? A. 1.123 B. 112.30 C. 0.890 D. 89.05