GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
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Textbook Question
Chapter 10, Problem 10.7AP
Recording and Reporting a Bond Issued at a Premium (with Premium Account) (P10-11)
LO10-5 Lemond Corporation is planning to issue bonds with a face value of $200,000 and a coupon rate of 10 percent. The bonds mature in three years and pay interest semiannually every June 30 and December 31. All the bonds were sold on January 1 of this year. Lemond uses the effective-interest amortization method and also uses a premium account. Assume an annual market rate of interest of 8.5 percent.
Required:
- 1. Provide the
journal entry to record the issuance of the bonds. - 2. Provide the journal entry to record the interest payment on June 30 and December 31 of this year.
- 3. What bonds payable amount will Lemond report on this year’s December 31
balance sheet ?
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Required information
P10-6 (Algo) Recording and Reporting Bonds Issued at a Discount LO10-4
[The following information applies to the questions displayed below.]
PowerTap Utilities is planning to issue bonds with a face value of $2,100,000 and a coupon rate of 9 percent. The bonds
mature in 10 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1
of this year. PowerTap uses the effective-interest amortization method. Assume an annual market rate of interest of 10
percent. (FV of $1, PV of $1. FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)
P10-6 Part 1
Required:
1. What was the issue price on January 1 of this year? (Round your final answers to nearest whole dollar amount.)
Issue price
$
2,100,000
On January 1, 2024, Neighborhood Credit Union (NCU) issued 6%, 20-year bonds payable with face value of $700,000. The bonds pay interest on June 30 and December 31.
Read the requirements
Requirement 1. If the market interest rate is 5% when NCU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain.
in this market, so investors will pay
The 6% bonds issued when the market interest rate is 5% will be priced at
They are
▼. They are
to acquire them.
Requirement 2. If the market interest rate is 8% when NCU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain.
in this market, so investors will pay
The 6% bonds issued when the market interest rate is 8% will be priced at
Requirement 3. The issue price of the bonds is 99. Joumalize the bond transactions. (Assume bonds payable are amortized using the straight-line amortization method. Record debits first, them
credits. Select explanations on the last line…
On January 1, Nic Inc. issued $100,000 of ten-year, 10% bonds that pay interest semiannually on June 30 and 31st. The bonds are sold to yield 8%.
A. Using the information provided in this problem, as well as your time value of money tables to calculate the issue price of the bond.
B. Was the bond issued at a premium or a discount, explain your answer.
Chapter 10 Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
Ch. 10 - From the perspective of the issuer, what are some...Ch. 10 - What are the primary characteristics of a bond?...Ch. 10 - Prob. 3QCh. 10 - Differentiate between a bond indenture and a bond...Ch. 10 - Prob. 5QCh. 10 - Prob. 6QCh. 10 - Prob. 7QCh. 10 - Prob. 8QCh. 10 - What is the book value of a bond?Ch. 10 - Prob. 10Q
Ch. 10 - Prob. 11QCh. 10 - Prob. 12QCh. 10 - Prob. 1MCQCh. 10 - Prob. 2MCQCh. 10 - Prob. 3MCQCh. 10 - Prob. 4MCQCh. 10 - Prob. 5MCQCh. 10 - Prob. 6MCQCh. 10 - Prob. 7MCQCh. 10 - Prob. 8MCQCh. 10 - Prob. 9MCQCh. 10 - Prob. 10MCQCh. 10 - Prob. 10.1MECh. 10 - Computing the Price of a Bond Issued at Par LO10-2...Ch. 10 - Understanding Financial Ratios 0-3, 10-6 The...Ch. 10 - Computing the Times Interest Earned Ratio LO10-3...Ch. 10 - Computing the Price of a Bond Issued at a Discount...Ch. 10 - Recording the Issuance and Interest Payments of a...Ch. 10 - Prob. 10.7MECh. 10 - Prob. 10.8MECh. 10 - Prob. 10.9MECh. 10 - Prob. 10.10MECh. 10 - Prob. 10.11MECh. 10 - Prob. 10.12MECh. 10 - Prob. 10.13MECh. 10 - Prob. 10.14MECh. 10 - Prob. 10.1ECh. 10 - Prob. 10.2ECh. 10 - Prob. 10.3ECh. 10 - Computing Issue Prices of Bonds Sold at Par, at a...Ch. 10 - Prob. 10.5ECh. 10 - Prob. 10.6ECh. 10 - Prob. 10.7ECh. 10 - Prob. 10.8ECh. 10 - (Chapter Supplement) Recording and Reporting a...Ch. 10 - Prob. 10.10ECh. 10 - Prob. 10.11ECh. 10 - Explaining Why Debt Is Issued at a Price Other...Ch. 10 - Prob. 10.13ECh. 10 - Prob. 10.14ECh. 10 - Prob. 10.15ECh. 10 - Prob. 10.16ECh. 10 - Prob. 10.17ECh. 10 - Prob. 10.18ECh. 10 - Prob. 10.19ECh. 10 - Prob. 10.20ECh. 10 - Prob. 10.21ECh. 10 - Prob. 10.22ECh. 10 - Prob. 10.23ECh. 10 - Prob. 10.24ECh. 10 - Prob. 10.1PCh. 10 - Prob. 10.2PCh. 10 - Comparing Bonds Issued at Par, at a Discount, and...Ch. 10 - Prob. 10.4PCh. 10 - Prob. 10.5PCh. 10 - Recording and Reporting Bonds Issued at a Discount...Ch. 10 - Recording and Reporting a Bond Issued at a...Ch. 10 - Prob. 10.8PCh. 10 - Prob. 10.9PCh. 10 - Prob. 10.10PCh. 10 - Prob. 10.11PCh. 10 - Prob. 10.12PCh. 10 - Prob. 10.13PCh. 10 - Prob. 10.14PCh. 10 - Prob. 10.15PCh. 10 - Prob. 10.16PCh. 10 - Prob. 10.1APCh. 10 - Prob. 10.2APCh. 10 - Prob. 10.3APCh. 10 - Prob. 10.4APCh. 10 - Prob. 10.5APCh. 10 - Prob. 10.6APCh. 10 - Recording and Reporting a Bond Issued at a Premium...Ch. 10 - Prob. 10.8APCh. 10 - Prob. 10.1CONCh. 10 - Prob. 10.1CPCh. 10 - Prob. 10.2CPCh. 10 - Prob. 10.3CPCh. 10 - Prob. 10.4CPCh. 10 - Prob. 10.5CPCh. 10 - Evaluating an Ethical Dilemma LO 10-1 Assume that...
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