RNB Corporation issued ten thousand P1,000 bonds on January 1, 2018. They have a ten-year term and pay interest semiannually.This is the partial bond amortization schedule for the bonds.PaymentCashEffective interestDecrease in balanceOutstanding balance11,487,7471400,000344,63255,36811,432,3792400,000342,97157,02911,375,3503400,000341,26158,73911,316,611400,000What is the effective annual rate of interest on the bonds?O 6%O 4%O 3%O 8%

Bonds are a form of loan or debt issued by the business, on which regular interest payments needs to…

Answered: RNB Corporation issued ten thousand…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 5EA: Diana Inc. issued $100,000 of its 9%, 5-year bonds for $96,149 when the market rate was 10%. The...

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On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?
Aggies Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018, and received $540,000. Interest is payable semi-annually. The premium is amortized using the straight-line method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. Dec. 31, 2018: entry to record payment of interest to bondholders C. Dec. 31, 2018: entry to record amortization of premium
Diana Inc. issued $100,000 of its 9%, 5-year bonds for $96,149 when the market rate was 10%. The bonds pay interest semi-annually. Prepare an amortization table for the first three payments.
Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $540,000. Interest is payable annually. The premium is amortized using the straightline method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. June 30, 2019: entry to record payment of interest to bondholders C. June 30, 2019: entry to record amortization of premium D. June 30, 2020: entry to record payment of interest to bondholders E. June 30, 2020: entry to record amortization of premium

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