a
Concept Introduction:
Retirement of bonds refers to the repurchase of bonds from investors. Retirement of bonds is carried out either at maturity, before maturity, or by conversion to stock. Retirement at maturity is always equal to par value. Retirement before maturity the issuer is unlikely to pay a price equal to par value. When a difference exists, the issuer gains or losses equal to the difference.
The amount of discount on the bonds at issue.
b
Concept Introduction:
Retirement of bonds refers to the repurchase of bonds from investors. Retirement of bonds is carried out either at maturity, before maturity, or by conversion to stock. Retirement at maturity is always equal to par value. Retirement before maturity the issuer is unlikely to pay a price equal to par value. When a difference exists, the issuer gains or losses equal to the difference.
The amortization of discount recorded on the bonds for the entire period of January 1 2021 through December 31, 2026.
c
Concept Introduction:
Retirement of bonds refers to the repurchase of bonds from investors. Retirement of bonds is carried out either at maturity, before maturity, or by conversion to stock. Retirement at maturity is always equal to par value. Retirement before maturity the issuer is unlikely to pay a price equal to par value. When a difference exists, the issuer gains or losses equal to the difference.
The carrying value of bonds as of the close of business on December 31, 2026.
d
Concept Introduction:
Retirement of bonds refers to the repurchase of bonds from investors. Retirement of bonds is carried out either at maturity, before maturity, or by conversion to stock. Retirement at maturity is always equal to par value. Retirement before maturity the issuer is unlikely to pay a price equal to par value. When a difference exists, the issuer gains or losses equal to the difference.
The
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Chapter 10 Solutions
FIN & MGR ACCOUNTING W/ACCESS
- 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 premiumarrow_forwardAggies 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 premiumarrow_forwardDisclosure 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?arrow_forward
- Chung 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?arrow_forwardBats 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 amortizationarrow_forward
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningIntermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
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