On the basis of the details of the following bonds payable and related discount accounts, indicate the items to be reported in the Financing Activities section of the statement of cash flows, assuming no gain or loss on retiring the bonds:
Q: The printing costs and legal fees associated with the issuance of bonds should Select one: a. be…
A: As per IFRS 9 and IAS 39, bonds issuance costs shall be accounted for as a reduction from the issue…
Q: How would the balance of the discount on bonds payable account usually be reported in the balance…
A: Definition: Bonds payable account: The account which holds the total liability to be paid to the…
Q: Explain how each of the columns in an amortization schedule is calculated, assuming the bonds are…
A: Amortization is the process of converting long term loans or bonds into series of periodic payment.…
Q: The purpose of a discount price for bonds is to: Select one: a. Increase profits b. Compensate the…
A: solution Concept The bond is issued at discount when -the coupon rate is less than…
Q: Gains on the redemption of bonds are reported in the Other Revenue section of the income statement.…
A: Introduction: Income statement is considered as one of the key financial statements that shows a…
Q: Which of the following is not a valid statement regarding bonds payable? a. Bonds issued by an…
A: Solution: "The amortization of a bond premium increases both the recorded interest expense and…
Q: In the following list, select each item as operating, investing, financing, or not separately…
A: This question is related to cash flow statement, in this question we have been asked to give the…
Q: Bond issuance costs must be reported separately as deferred charges and charged to expense over the…
A: The costs associated with issuing the bonds are known as bond issue costs. Example - Legal fees,…
Q: In auditing for unrecorded long-term bonds payable, an audit team most likely willa. Perform…
A: Long term bonds allude to the longest development bond offering from the U.S. Depository. It can…
Q: All of the following statements regarding available-for-sale debt securities are true, except for…
A: Debt Securities available for sale are recorded at the par value. There is no rule to recognized…
Q: Bond premium should be reported in the statement of financial position A. along with other premium…
A: A premium on bonds means investors are satisfied with a rate of interest lower than the rate stated…
Q: A debit to Discount on Bonds Payable would most likely be possible on which of the situations?…
A: The bonds are issued at discount when market rate is higher than the coupon rate of interest.
Q: Balance sheet values are calculated using compound interest (present value) calculations for all of…
A: The present value method is used to get the present value of different future cash flows.
Q: When using the effective−interest amortization method for bonds, the amount of the interest expense…
A: The Effective−Interest Amortization Method : It is the method in which Interest expenses is…
Q: According to the PFRS, discount or premium on bonds payable may be amortized using the straight-line…
A: The given statement is True.. According to the PFRS, discount or premium on bonds payable may be…
Q: Bond issue costs, such as printing fees, legal fees, commissions, etc. are most appropriately…
A: solution Bond issue costs, such as printing fees, legal fees, commissions, etc. are most…
Q: Bonds which are collateralized by specific assets in the event the borrowing company defaults on…
A: Bonds are a form of liability for the business. These can be issued for short term or long term.…
Q: When accounting for a bond whose interest is included in the face amount, the account Discount in…
A: Discount in Bond payable Issue of bond which can be incurred in between face value, discount and…
Q: Determine the estimated amount payable to the holder of the bonds.
A: This question is related to the liquidation of the company. The process of closing a firm and…
Q: Refundable deposits Consists of cash on property received from customers but which are refundable…
A: In a kind of sum where we need to match the items means that we have got few terms on one side and…
Q: Which of the following statements regarding bonds is true? Group of answer choices a. Bonds are…
A: Bonds are common fixed income instruments issued by an organization to the investor.
Q: At what amount should trading, available-for-sale, andheld-to-maturity debt securities be reported…
A:
Q: Under PFRS 9, bond investments held for collection of contractual cash flows are measured at
A: As per PFRS - 9, all financial instruments are initially measured at fair value adjusted by the…
Q: Bond issue costs, such as printing fees, legal fees, commissions, etc. are most appropriately…
A: Bonds are a form of loan or debt which is being issued by the business, on which regular interest…
Q: What type of account is Discount on Bonds Payable? What is its normal balance? Is it added to or…
A: Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various…
Q: When bonds are purchased between interest dates, the accrued interest should be a. debited to the…
A: Accrued Interest It is the unpaid interest which is earned by a bondholder since last interest…
Q: In the Consolidated Statement of Cash Flows, Fairfield Communities, Inc. reported the following…
A: Statement of cash flows: This statement reports all the cash transactions which are responsible for…
Q: What is the effective interest rate of a bond or other debt instrument measured at amortized cost?…
A: The effective rate is increased times the bond's value at the beginning of the accounting amount to…
Q: Investments in debt securities are classified into the following categories according to…
A: Investment in debt securities: Purchase of debt securities of another corporation.
Q: How do we compute for the Carrying Value beginning of a Bonds Payable? of a Notes Payable? Are there…
A: The carrying value (or "book value") of the bond at a given point in time is its face value minus…
Q: Which of these items related to bonds would be added back in the Operating section of the SCF under…
A: Bonds means the kind of instrument which acknowledges the debt due from one company to bond holder…
Q: Which of the following does not impact the calculation ofthe cash interest payments to be made to…
A:
Q: If a bond issuer incurs a loss on bond redemption, the loss is reported on the income statement…
A: Revenue - It is amount of income earned through sales of goods or services . Cost of goods sold -…
Q: How is the premium or discount on debt investments at fair value through profit or loss accounted…
A: In case of FVTPL the initial recognition is at fair value.
Q: When the initial present value of a bond payable is higher than its face amount, an entity would…
A: The answer is stated below:
Q: The balance in Unamortized Discount on Bonds Payable should be O a. reported separately in the…
A: Unamortized discounts on bonds payable are considered as a decrease in carrying value or book value…
Q: "Cash restricted for retirement of long-term debt" should be reported under which section of the…
A: Current assets: These are the asset that is expected to be sold or consumed for the purpose of the…
Q: Item Retire bonds Issue bonds Amortization of discount Section of Statement of Cash Flows Added or…
A: >Statement of Cash flows is one of the financial statements, and is prepared for a particular…
Q: Discuss the process of accounting for long term bonds from issuance to sale or retirement
A: Bond accoutning in stages is given as follows. On issue or sale: 1) issued at par, Cash…
Q: What adjustment must be made at the end of the period for trading debt investments and…
A:
Q: Bond premium should be reported in the statement of financial position O at the present value of the…
A: Introduction:- Bond premium means investors are willing to pay more than the face value of the…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- BONDS ISSUED AT A DISCOUNT, REDEEMED AT A GAIN Ellis Co. issued the following bonds at a discount: REQUIRED Prepare journal entries for: (a) Issuance of the bonds. (b) Interest payment and discount amortization on the bonds on September 30, 20-1. (c) Year-end adjustment on the bonds for 20-1. (d) Reversing entry for the beginning of 20-2. (e) Redemption of 50,000 of the bonds on April 1, 20-4, at 96.Problem Reporting Long-Term Debt Fridley Manufacturings accounting records reveal the following account balances after adjusting entries are made on December 31, 2020. Required: Prepare the current liabilities and long-term debt portions of Fridleys balance sheet at December 31, 2020. Provide a separate line item for each issue (do not combine separate bonds or notes payable), but some items may need to be split into more than one item. Accounts payable $ 62,500 Bonds payable (9.4%, due in 2027) 800,000 Lease liability* 41,500 Bonds payable (8.7%, due in 2023) 50,000 Deferred tax liability* 133.400 Discount on bonds payable (94%, due in 2027) 12,600 Income taxes payable 26,900 * Long term liability Interest payable $ 38,700 Installment note payable (8%, equal installments due 2021 to 2024) 120,000 Notes payable (7.8%, due in 2025) 400,000 Premium on notes payable (7.8%, due in 2025) 6, [00 Note payable, 4% $50,000 face amount. due in 2026 (net of discount) 31,900Reporting issuance and retirement of ling-term debt On the basis of the details of the following bonds payable and related descount aacounts,indicates the items to be reported in the "Cash flows from financing activities" section of the statement of cash flows, assuming no gain or loss on retiring the bonds:
- Reporting Issuance and Retirement of Long-Term Debt On the basis of the details of the following bonds payable and related discount accounts, indicate the items to be reported in the Financing Activities section of the statement of cash flows, assuming no gain or loss on retiring the bonds: Account Bonds Payable Account NO. Date Item Debit Credit Balance Debit Balance Credit Jan. 1 Balance 540,000 Jan. 2 Retire bonds 108,000 432,000 Jan. 3 Issue bonds 324,000 756,000 Account Discount on Bonds Payable Account NO. Date Item Debit Credit Balance Debit Balance Credit Jan. 1 Balance 42,300 Jan. 2 Retire bonds 8,640 15,660 June 30 Issue bonds 27,700 37,360 Dec. 31 Amortize discount 1,870 35,490 Item Section of Statement of Cash Flows Added or Deducted Amount Retire bonds Financing activities section Deducted $ Issue bonds…Reporting Issuance and Retirement of Long-Term Debt On the basis of the details of the following bonds payable and related discount accounts, indicate the items to be reported in the “Cash flows from financing activities” section of the statement of cash flows, assuming no gain or loss on retiring the bonds: ACCOUNT Bonds Payable ACCOUNT NO. Balance Date Item Debit Credit Debit Credit Jan. 1 Balance 750,000 2 Retire bonds 150,000 600,000 June 30 Issue bonds 450,000 1,050,000 ACCOUNT Discount on Bonds Payable ACCOUNT NO. Balance Date Item Debit Credit Debit Credit Jan. 1 Balance 33,750 2 Retire bonds 12,000 21,750 June 30 Issue bonds 30,000 51,750 Dec. 31 Amortize discount 2,625 49,125Please help me answer these with the correct solutions Reporting Issuance and Retirement of Long-Term Debt On the basis of the details of the following bonds payable and related discount accounts, indicate the items to be reported in the Financing Activities section of the statement of cash flows, assuming no gain or loss on retiring the bonds: Account Bonds Payable Account NO. Date Item Debit Credit Balance Debit Balance Credit Jan. 1 Balance 540,000 Jan. 2 Retire bonds 108,000 432,000 Jan. 3 Issue bonds 324,000 756,000 Account Discount on Bonds Payable Account NO. Date Item Debit Credit Balance Debit Balance Credit Jan. 1 Balance 42,300 Jan. 2 Retire bonds 8,640 15,660 June 30 Issue bonds 27,700 37,360 Dec. 31 Amortize discount 1,870 35,490 Item Section of Statement of Cash Flows Added or Deducted Amount Retire bonds…
- On the basis of the details of the following bonds payable and related discount accounts, indicate the items to be reported in the Financing Activities section of the statement of cash flows, assuming no gain or loss on retiring the bonds: ACCOUNT Bonds Payable ACCOUNT NO. Balance Date Item Debit Credit Debit Credit Jan. 1 Balance 750,000 2 Retire bonds 150,000 600,000 June 30 Issue bonds 450,000 1,050,000 ACCOUNT Discount on Bonds Payable ACCOUNT NO. Balance Date Item Debit Credit Debit Credit Jan. 1 Balance 33,750 2 Retire bonds 12,000 21,750 June 30 Issue bonds 30,000 51,750 Dec. 31 Amortize discount 2,625 49,125Which method involves the larger adjustment in the Cash Flow Statement (prepared under the indirect method) to net income in deriving funds provided by operations in the first year for a bond issued at more than par value Multiple Choice All the three statements about bonds are correct effective interest method of accounting for interest expense on bonds declining balance method of accounting for interest expense on bonds straight-line method of accounting for interest expense on bonds None of the other alternatives are correctOn the basis of the details of the following bonds payable and related discount accounts, indicate the items to be reported in the financing activities section of the statement of cash flows, assuming no gain or loss on retiring the bonds:
- Assume bonds payable are amortized using the straight-line amortization method unless stated otherwise. Computing the debt to equity ratio Ludwig Corporation has the following data as of December 31, 2018: Compute the debt to equity ratio at December 31, 2018.Cagney Company sold $248,000 of bonds on January 1, 2024. A portion of the amortization table follows. Period CashPayment(Credit) InterestExpense(Debit) Discounton BondsPayable(Credit) Discounton BondsPayableBalance CarryingValue At issue $8,000 $240,000 06/30/24 $12,000 $12,800 $800 7,200 240,800 12/31/24 12,000 12,800 800 6,400 241,600 06/30/25 ? ? ? ? ? Required: 1. Determine the stated interest rate on these bonds. Round your answer to the nearest whole number.fill in the blank 1 % 2. Calculate the interest expense and the discount amortization for the interest period ending on June 30, 2025. Interest expense $fill in the blank 2 Discount amortization $fill in the blank 3 3. Calculate the liability balance shown on a balance sheet after the interest payment is recorded on June 30, 2025.$fill in the blank 4Assume bonds payable are amortized using the straight-line amortization method unless stated otherwise. Computing the debt to equity ratio Jackson Corporation has the following amounts as of December 31, 2018. Compute the debt to equity ratio at December 31, 2018.