owesubject-AccountingOn May 1, 2024, crane corp. issued 955,000 of 5-year, 7% bonds at $916,270. This price resulted in an effective interest rate of 8% on the bonds. The bonds pay interest semi-annually on May 1. Crane's year end is April 30: DateMay 1, 2024Nov. 1,2024May 1, 2025Nov. 1,2025May 1, 2026Nov. 1,2026May 1, 2027Crane CORP.Bond Discount Amortization TableEffective Interest Method-Semi-Annual Interest Payments7% Bonds Issued at market rate of 8%Interest Payment33,42533,425MInterest Expense38,20036,841.80Discount Amortization4,7753,416.80T$Bond Carrying92 Nov. 1,2027May 1, 2028Nov. 1,2028May 1, 2029NOO

Each periodic payment on bonds is listed in a table called an amortization schedule over the course…

owe subject-Accounting On May 1, 2024, crane corp. issued 955,000 of 5-year, 7% bonds at $916,270. This price resulted in an effective interest rate of 8% on the bonds. The bonds pay interest semi-annually on May 1. Crane's year end is April 30

owe subject-Accounting On May 1, 2024, crane corp. issued 955,000 of 5-year, 7% bonds at $916,270. This price resulted in an effective interest rate of 8% on the bonds. The bonds pay interest semi-annually on May 1. Crane's year end is April 30

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 43CE: Cornerstone Exercise (Appendix 9A) Bond Issue Price On January 1, 2021, Callahan Auto issued...

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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

owe

subject-Accounting

On May 1, 2024, crane corp. issued 955,000 of 5-year, 7% bonds at $916,270. This price resulted in an effective interest rate of 8% on the bonds. The bonds pay interest semi-annually on May 1. Crane's year end is April 30:

Date
May 1, 2024
Nov. 1,
2024
May 1, 2025
Nov. 1,
2025
May 1, 2026
Nov. 1,
2026
May 1, 2027
Crane CORP.
Bond Discount Amortization Table
Effective Interest Method-Semi-Annual Interest Payments
7% Bonds Issued at market rate of 8%
Interest Payment
33,425
33,425
M
Interest Expense
38,200
36,841.80
Discount Amortization
4,775
3,416.80
T
$
Bond Carrying
92

Nov. 1,
2027
May 1, 2028
Nov. 1,
2028
May 1, 2029
NOO

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