PB4. LO 13.2 Irving Inc. sold bonds with a $50,000, 10% interest, and 10-year term at $52,000. What is the total amount of interest expense over the life of the bonds?
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- Starmount Inc. sold bonds with a $50,000 face value, 12% interest, and 10-year term at $48,000. What is the total amount of interest expense over the life of the bonds?PB3. 13.2 Starmount Inc. sold bonds with a $50,000 face value, 12% interest, and 10-year term at $48,000. What is the total amount of interest expense over the life of the bonds?E13.8 (LO 2) (Refinancing of Short-Term Debt) On December 31, 2020, McDaniel Company had $1,200,000 of short-term debt in the form of notes payable due February 2, 2021. On January 21, 2021, the company issued 25,000 shares of its common stock for $38 per share, receiving $950,000 proceeds after brokerage fees and other costs of issuance. On February 2, 2021, the proceeds from the stock sale, supplemented by an additional $250,000 cash, are used to liquidate the $1,200,000 debt. The December 31, 2020, balance sheet is issued on February 23, 2021.InstructionsShow how the $1,200,000 of short-term debt should be presented on the December 31, 2020, balance sheet, including note disclosure.
- 62. On January 1, 2021, M&M company purchased P1,000,000, 12% bonds for P1,065,000, a price that yields 10%. The bonds pay interest semi-annually every January 1and July 1. On December 31, 2021, each bond is selling at P1,055. If the debt investments are classified as at amortized cost, what is the carrying value of the debt investment reported at December 31, 2021? A.P1,051,163B.P1,000,000C.P1,065,000D.P1,055,000A P1000 000.00 issue of 3%, 15-year bonds is sold at 95%. The miscellaneous initial expense of the financing were P20 000.00 and yearly expenses of P2000.00 is incurred. What is the true cost the company is paying for the money it borrowed? (Ans. 3.8%)Irving Inc. sold bonds with a $50,000, 10% interest, and 10-year term at $52,000. What is the total amount of interest expense over the life of the bonds?
- 3. On January 1, 2022, Tony Orlando Industries had outstanding $1,000,000 of 12% bonds with a bookamount of $966,130. The indenture specified a call price of $981,000. The bonds were issued previouslyat a price to yield 14%. Tony Orlando called the bonds (retired them) on July 1, 2022. What is theamount of the loss on early extinguishment?a. $0.b. $6,932.c. $7,241.d. $7,629EA6. LO 13.2 Oak Branch Inc. issued $700,000 of 5%, 10-year bonds when the market rate was 4%. They received $757,243. Interest was paid semi-annually. Prepare an amortization table for the first three years of the bonds. Cash Interest Payment Rate 0.025 Interest on Carrying Value Rate 0.02 Amortization of Premium Carrying Value Jan. 1, Year 1 757,243 June 30, Year 1 Dec. 31, Year 1 June 30, Year 2 Dec. 31, Year 2 June 30, Year 3 Dec. 31, Year 317. On May 1, 2020, Ceylon Corporation sold $90,000 of its 15%, five-year bonds dated January 1, 2020, for $99,000 total cash. The bonds sold at a. 105b. 100c. 99d. 95
- Ma4. On June 30, 2022 Maxim Corp purchased 7%, $100,000 10 year bonds. Interest is paid annually on Dec 31. Maxim uses the amortized cost model and the effective interest method for amortizing any premium or discount. The current market rate was 8% and as a result Maxim paid $93,290 for the bonds. On December 31, 2022 the bonds have a market value of $90,000. The bonds had a market value of $93,000 on December 31, 2023. Assuming the company uses amortized cost to account for the investment, record the purchase of the bonds and the entries for 2022.BE11.1 (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.1. ABC, Inc. issued P1,000,000, 10% bonds to yield 8%. bond issuance costs were P10,000. How should ABC calculate the net proceeds to be received from the issuance? * a. Discount the bonds at the stated rate of interest. b. Discount the bonds at the stated rate of interest and deduct bond issuance costs. c. Discount the bonds at the market rate of interest. d. Discount the bonds at the market rate of interest and deduct bond issuance costs.
