What is the initial carrying amount of the liability?
Q: 21. On January 01, 2019, SUNOD NA ANG LEASES LTD. issued 3- year bonds with face value of P5,000,000…
A: Given: Face value = P5,000,000 Price = 99% Nominal rate = 10% Issue cost = P150,000
Q: On March 1, 2022, a company issued a four-year, P3,000,000 face value, 11% term bonds for…
A: Bond is issued by the company for raising finance for the business working. It is considered a…
Q: n January 1, 2021, Nebraska Company issued a 3-year bond with face value of P1,500,000 and a 9%…
A: Valuation of Bond
Q: On July 1, 2019, Fewa Company issued P4,000,000 of 16% bonds to yield 14%. Interest is payable…
A: Bond Interest Expense in Effective Interest Method of Amortisation will be = Present Value of Bond *…
Q: On July 1, 2019, Honda Company issued 5,000 of the P1,000 face value, 8% bonds for P4,615,000 to…
A: Semiannual interest payment = face value of bonds x rate of interest x no. of months/12 = P5,000,000…
Q: On December 31, 2020, Whitfield Corp. issued $ 400,000 10% bonds, due on December 31, 2025. Interest…
A: The bonds are to be issued at par, discount or premium depending on the market rate of bonds.
Q: On January 1, 2020, Burger Company issued P2,000,000 of 10-year, 8% bonds at par. The bonds, dated…
A: Bonds carrying amount at January 2, 2020 = Par value of bonds - Bond issue costs
Q: On November 1, 2021, Mason Company issued P8,000,000 of its 10 year, 8% term bonds dated October 1,…
A: Total discount on issue of bonds = Face value of bonds - issue value of bonds = P8,000,000 -…
Q: Sun Corporation markets a 10-year bond issue dated January 1, 2020. The bonds pay interest…
A: solution : Hence the correct answer is option d. Month accrued: 1, Amortization period: 113 months…
Q: On July 1, 2021, Glamorous Corporation issued 11% bonds in the face amount of P2,000,000 that mature…
A: Interest = P2,000,000 × 11% = P220,000
Q: Quatro Co. issues bonds dated January 1, 2019, with a par value of $400,000. The bonds’ annual…
A: 1. Explain the amount of the premium on these bonds at issuance.
Q: On March 1, 2021, BabyM company issued a four-year, P3,000,000 face value, 11% term bonds for…
A: Bonds issued at Premium: When a bond is issued at a premium, that means that the bond is sold for an…
Q: On January 1, 2020, when the market rate for bonds interest was 12%, Black Corporation issued P10…
A: Amortization of bond: The process of allocation and reduction of the discount or premium on bonds…
Q: Quatro Co. issues bonds dated January 1, 2019, with a par value of $720,000. The bonds’ annual…
A: Given that: Par value of bonds = $720,000 Issue price of bonds $757,732
Q: On January 1, 2020, Burger Company issued P2,000,000 of 10-year, 8% bonds at par. The bonds, dated…
A: Bonds carrying amount at January 2, 2020 = Var value of bonds - Bond issue costs
Q: On January 1, 2021, Toit Company issued a 10-year 9% bonds payable of P10,000,000 for a market rate…
A: Present value of bond:-
Q: On January 1, 2021, Mawi Co. issued 1,000, P4,000, 12%, 3 years bonds for P4,198,948. Principal is…
A: The question is based on concept of valuation of bond , value of bond is calculated as discounted…
Q: On March 1, 2014, Khaleesi Company issued 10-year P5,000,000 8% term bonds dated March 1, 2014 and…
A: Unamortized discount on bonds payable of 333,906
Q: On January 1, 2021, LACEA COMPANY issued 7% term bonds with a face amount of P1,000,000 due January…
A:
Q: On December 31, 2020, Whitfield Corp. issued $ 400,000 10% bonds, due on December 31, 2025. Interest…
A: Maturity period = December 31, 2020 to December 31, 2025 = 5 years Semi annual period = 5 years x 2…
Q: Quatro Co. issues bonds dated January 1, 2019, with a par value of $400,000. The bonds’ annual…
A: 1. What is the amount of the premium on these bonds at issuance? When a company issues bonds at the…
Q: On Dec. 31, 2020, Zallag company issues callable bonds that havea $700,000 par value, mature in 10…
A: Bonds are the amount company borrowed from the investors for a fixed income and for a period of…
Q: On January 1, 2021, MACADAMIA Company issued 5 year bonds with face value of ₱5,000,000 at 110. The…
A: Amount received from the bond issuance = (Face value of bonds x issue price/100) - bond issue cost…
Q: On January 1,2020, Pharaoh Company issued 3-year bonds with a face value of P1,200,000 and stated…
A: The present value of bond is calculated on the annual cash outflows from the bond interest and…
Q: On January 1, 2021, White Water issues $600,000 of 7% bonds, due in 10 years, with interest payable…
A: Annual interest payment = Face value of bonds x rate of interest x time = $600,000 x 7% x 1 year =…
Q: On January 1, 2019, Company C issues $200,000 of its 6% bonds which mature in 10 years. Interest is…
A: Determine the price of the bond: Present value of principle amount ($200,000, 4%, 10 years)…
Q: On January 1, 2021, Borg Company issued 4,000 of its 8% P2,000 face value bonds at 97 including…
A: The bonds are issued at discount when the coupon rate of bonds is lower than the stated rate of…
Q: On January 1, 2018, Paradiso Company issued 1,000 of its 8%, $1,000 bonds at 93. Interest is payable…
A: Bonds: Bonds are a kind of interest-bearing notes payable, usually issued by companies,…
Q: On January 1, 2021, GLITTER Company issued 10% bonds dated January 1, 2021 with a face amount of…
A: Half year coupon rate=10%2=5%
Q: On September 1, 2021, Evansville Lumber Company issued $80 million in 20-year, 10 percent bonds…
A: Discount Amortization=Amount of bonds issued×Rate of interest×Number of monthPeriod of issuance…
Q: On January 1, 2018, Paradiso Company issued 1,000 of its 8%, $1,000 bonds at 93. Interest is payable…
A: Definition: Bonds: Bonds are a kind of interest-bearing notes payable, usually issued by…
Q: On January 1, 2020, PS ind issued P600,000 of 7% bonds, due in 10 years. The bonds were issued for…
A: Introduction: Journal entries are the basis of double accounting rules, which have been used for…
Q: On January 1, 2021, White Water issues $600,000 of 7% bonds, due in 10 years, with interest payable…
A: Date (A) Interest payment(B) Interest expenses (C) Amortisation on bond discount(C-B=D) Debit…
Q: On March 1, 2021, JebaMac Company issued 6% term bonds with a face amount of P1,000,000 due March 1,…
A: Jeba Company has recognized the bond payable as per amortized cost method using the effective…
Q: Quatro Co. issues bonds dated January 1, 2019, with a par value of $880,000. The bonds' annual…
A: Answer 1:
Q: Using effective interest method, what amount of the bond discount should be amortized for the six…
A: Bonds: Bonds are the financial debt instruments issued by the corporations to raise capital for…
Q: On January 1, 2021, Solis Co. issued its 10% bonds in the face amount of P3,000,000, which mature on…
A: Bonds are an obligation on an entity which is to be repaid on its maturity date. These are issued…
Q: On July 1, 2019, Fewa Company issued P4,000,000 of 16% bonds to yield 14%. Interest is payable…
A: Solution : Given: Face value =4000000 Coupon rate =16% Interest payable =semi…
Q: On January 1, 2021, White Water issues $600,000 of 7% bonds, due in 10 years, with interest payable…
A:
Q: n January 1, 2019, Mitsubishi Company issued its 9% P9,000,000 face value bonds, which matures on…
A: Solution: Discount on bond payable, Jan 1 , 2019 = face value - issue price = 9000000 - 8451000 =…
Q: On January 1, 2020, EF company purchased P1,000,000, 12% bonds for P1,065,000, a price that yields…
A: Bonds: Bonds are the financial security that are being tradeable in the stock market by the…
Q: On March 1, 2021, JebaMac Company issued 7% term bonds with a face amount of P2,000,000 due March 1,…
A: Computation of issue price of bond and discount on issue of bond
Q: hat is the amount of the gain on the bond redemptio
A:
Q: At the beginning of 2020, Leira Corporation issued 10% bonds with a face value of P 1,500,000. These…
A: Working:
Q: On January 01, 2019, SUNOD NA ANG LEASES LTD. issued 3-year bonds with face value of P5,000,000 at…
A: PV of cash flows=Present value of Future payments(Interest+Face value) @ YTM
Q: On January 1, 2020, Edison Co. issued eight-year bonds with a face value of P 2,000,000 and a stated…
A: Solution: Bonds are the debt instruments issued by entity to obtain funding. Bonds are having…
Q: On July 1, 2019, Pen Co. issued 4,000 of its 8%, P1,000 face value bonds payable for P3,504,000. The…
A: Introduction: Bonds discount: When bonds are issued at less than its face value called bonds…
Q: On January 1, 2021, Ithaca Corp. purchases Cortland Inc. bonds that have a face value of $210,000.…
A: 1. The journal entry to record the purchase of the bonds: Formulation:
Q: Quatro Co. issues bonds dated January 1, 2019, with a par value of $720,000. The bonds' annual…
A: Premium on bonds at the time of issuance = Issue price of bonds - Face value of bonds
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- On July 1, a company sells 8-year $250,000 bonds with a stated interest rate of 6%. If interest payments are paid annually, each interest payment will be ________. A. $120,000 B. $60,000 C. $7,500 D. $15,000Volunteer 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 premiumChung 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?
- 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 premiumDisclosure of Debt On May 1, 2019, Ramden Company issues 13% bonds with a face value of 2 million. The bond contract calls for retirement of the bonds in periodic installments of 200,000, starting on May 1, 2020, and continuing on each May 1 thereafter until all bonds are retired. Required: How would the preceding information appear in Ramdens balance sheets on December 31, 2019, and 2020?Wilbury Corporation issued 1 million of 13.5% bonds for 985,071.68. The bonds are dated and issued October 1, 2019, are due September 30, 2020, and pay interest semiannually on March 31 and September 30. Assume an effective yield rate of 14%. Required: 1. Prepare a bond interest expense and discount amortization schedule using the straight-line method. 2. Prepare a bond interest expense and discount amortization schedule using the effective interest method. 3. Prepare 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. If income before interest and income taxes of 30% in 2020 is 500,000, compute net income under each alternative. 5. Assume the company retired the bonds on June 30, 2020, at 98 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 6. Compute the companys times interest earned (pretax operating income divided by interest expense) for 2020 under each alternative.
- Naval Inc. issued $200,000 face value bonds at a discount and received $190,000. At the end of 2018, the balance in the Discount on Bonds Payable account is $5,000. This years balance sheet will show a net liability of ________. A. $200,000 B. $180,000 C. $195,000 D. $205,000On 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?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