Bonds Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond. Effective interest rate of amortization bond Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate. Accrued interest The amount of interest that has already occurred, but the payment is not made yet, is known as accrued interest. To find out: The amount related to bonds that B would report in its balance sheet at September 30, 2018.

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Answer 1

Question

Chapter 14, Problem 14.25P

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

Accrued interest

The amount of interest that has already occurred, but the payment is not made yet, is known as accrued interest.

To find out: The amount related to bonds that B would report in its balance sheet at September 30, 2018.

(2)

To determine

To find out: The amount that B would report in its income statement for the year ended September 30, 2018.

(3)

To determine

To find out: The amount would be reported in the statement of cash flows for the year ended as on 30^th September 2018.

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Answer 2

Question

Chapter 14, Problem 14.25P

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

Accrued interest

The amount of interest that has already occurred, but the payment is not made yet, is known as accrued interest.

To find out: The amount related to bonds that B would report in its balance sheet at September 30, 2018.

(2)

To determine

To find out: The amount that B would report in its income statement for the year ended September 30, 2018.

(3)

To determine

To find out: The amount would be reported in the statement of cash flows for the year ended as on 30^th September 2018.

Expert Solution & Answer

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Answer 3

Question

Chapter 14, Problem 14.25P

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

Accrued interest

The amount of interest that has already occurred, but the payment is not made yet, is known as accrued interest.

To find out: The amount related to bonds that B would report in its balance sheet at September 30, 2018.

(2)

To determine

To find out: The amount that B would report in its income statement for the year ended September 30, 2018.

(3)

To determine

To find out: The amount would be reported in the statement of cash flows for the year ended as on 30^th September 2018.

Expert Solution & Answer

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Answer 4

Question

Chapter 14, Problem 14.25P

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

Accrued interest

The amount of interest that has already occurred, but the payment is not made yet, is known as accrued interest.

To find out: The amount related to bonds that B would report in its balance sheet at September 30, 2018.

(2)

To determine

To find out: The amount that B would report in its income statement for the year ended September 30, 2018.

(3)

To determine

To find out: The amount would be reported in the statement of cash flows for the year ended as on 30^th September 2018.

Expert Solution & Answer

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See solution

Answer 5

Chapter 14, Problem 14.25P

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

Accrued interest

The amount of interest that has already occurred, but the payment is not made yet, is known as accrued interest.

To find out: The amount related to bonds that B would report in its balance sheet at September 30, 2018.

(2)

To determine

To find out: The amount that B would report in its income statement for the year ended September 30, 2018.

(3)

To determine

To find out: The amount would be reported in the statement of cash flows for the year ended as on 30^th September 2018.

Answer 6

Chapter 14, Problem 14.25P

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

Accrued interest

The amount of interest that has already occurred, but the payment is not made yet, is known as accrued interest.

To find out: The amount related to bonds that B would report in its balance sheet at September 30, 2018.

Answer 7

Chapter 14, Problem 14.25P

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

Accrued interest

The amount of interest that has already occurred, but the payment is not made yet, is known as accrued interest.

To find out: The amount related to bonds that B would report in its balance sheet at September 30, 2018.

Answer 8

(2)

To determine

To find out: The amount that B would report in its income statement for the year ended September 30, 2018.

Answer 9

(2)

To determine

To find out: The amount that B would report in its income statement for the year ended September 30, 2018.

Answer 10

(3)

To determine

To find out: The amount would be reported in the statement of cash flows for the year ended as on 30^th September 2018.

Answer 11

(3)

To determine

To find out: The amount would be reported in the statement of cash flows for the year ended as on 30^th September 2018.

Answer 12

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Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

Ch. 14 - How is periodic interest determined for...Ch. 14 - As a general rule, how should long-term...Ch. 14 - How are bonds and notes the same? How do they...Ch. 14 - What information is contained in a bond indenture?...Ch. 14 - On January 1, 2018, Brandon Electronics issued 85...Ch. 14 - How is the price determined for a bond (or bond...Ch. 14 - A zero-coupon bond pays no interest. Explain.Ch. 14 - Prob. 14.8Q Ch. 14 - Compare the two commonly used methods of...Ch. 14 - Prob. 14.10Q

Solution Summary: The author explains that bonds are a kind of interest bearing notes payable, usually issued by companies, universities, and governmental organizations.

To find out: The amount that B would report in its income statement for the year ended September 30, 2018.

To find out: The amount would be reported in the statement of cash flows for the year ended as on 30^th September 2018.

Want to see the full answer?

Chapter 14 Solutions

Solution Summary: The author explains that bonds are a kind of interest bearing notes payable, usually issued by companies, universities, and governmental organizations.

To find out: The amount that B would report in its income statement for the year ended September 30, 2018.

To find out: The amount would be reported in the statement of cash flows for the year ended as on 30th September 2018.

Want to see the full answer?

Chapter 14 Solutions

To find out: The amount would be reported in the statement of cash flows for the year ended as on 30^th September 2018.