1. Explanation Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations. Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations. Premium on bonds payable: It occurs when the bonds are issued at a high price than the face value. Prepare journal entry for cash proceeds from the issuance of the bonds on July 1, 20Y1. Date Account Title and Explanation Post Ref Debit ($) Credit ($) 20Y1 Cash 31,951,110 July 1 Premium on Bonds Payable (1) 1,951,110 Bonds Payable 30,000,000 (To record issue of bonds at premium) Table (1) Cash is an asset and it is increased... 2. a. To determine To prepare : Journal entry to record first semiannual interest payment and amortization of bond premium on December 31, 20Y1. b. To determine To prepare : Journal entry to record second interest payment and amortization of bond discount on June 30, 20Y2. 3. To determine The amount of total interest expense for 20Y1.

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Chapter 11, Problem 11.5APR

To determine

To prepare: Journal entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.

2. a.

To determine

To prepare: Journal entry to record first semiannual interest payment and amortization of bond premium on December 31, 20Y1.

To determine

To prepare: Journal entry to record second interest payment and amortization of bond discount on June 30, 20Y2.

To determine

The amount of total interest expense for 20Y1.

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Chapter 11 Solutions

Corporate Financial Accounting

Ch. 11 - Describe the two distinct obligations incurred by...Ch. 11 - Explain the meaning of each of the following terms...Ch. 11 - If you asked your broker to purchase for you a 11%...Ch. 11 - A corporation issues 26,000,000 of 9% bonds to...Ch. 11 - If bonds issued by a corporation are sold at a...Ch. 11 - Prob. 6DQ Ch. 11 - Bonds Payable has a balance of 5,000,000 and...Ch. 11 - Prob. 8DQ Ch. 11 - Prob. 9DQ Ch. 11 - Issuing bonds at face amount On January 1, the...

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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
Edward Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $480,000. Interest is payable semiannually. The discount 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 discount

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Journal entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.

Solution Summary: The author explains that bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.

To prepare: Journal entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.

To prepare: Journal entry to record first semiannual interest payment and amortization of bond premium on December 31, 20Y1.

To prepare: Journal entry to record second interest payment and amortization of bond discount on June 30, 20Y2.

The amount of total interest expense for 20Y1.

Chapter 11 Solutions