ACCOUNT Bonds Payable ACCOUNT NO. Balance Debit Credit Debit Credit Date Item Balance Jan. 750,000 600,000 1,050,000 Retire bonds 2 150,000 June 30 Issue bonds 450,000 ACCOUNT Discount on Bonds Payable ACCOUNT NO. Balance Debit Credit Debit Credit Date Item Balance Jan. 33,750 21,750 51,750 Retire bonds 2 12,000 Issue bonds June 30 30,000 31 Amortize discount Dec. 2,625 49,125

ACCOUNT Bonds Payable ACCOUNT NO. Balance Debit Credit Debit Credit Date Item Balance Jan. 750,000 600,000 1,050,000 Retire bonds 2 150,000 June 30 Issue bonds 450,000 ACCOUNT Discount on Bonds Payable ACCOUNT NO. Balance Debit Credit Debit Credit Date Item Balance Jan. 33,750 21,750 51,750 Retire bonds 2 12,000 Issue bonds June 30 30,000 31 Amortize discount Dec. 2,625 49,125

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter8: Liabilities And Stockholders' Equity

Section: Chapter Questions

Problem 8.3.3MBA

See similar textbooks

Similar questions

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.
1. ABC, Inc. issued P1,000,000, 10% bonds to yield 8%. bond issuance costs were P10,000. How should ABC calculate the net proceeds to be received from the issuance? * a. Discount the bonds at the stated rate of interest. b. Discount the bonds at the stated rate of interest and deduct bond issuance costs. c. Discount the bonds at the market rate of interest. d. Discount the bonds at the market rate of interest and deduct bond issuance costs.
The issue price of the bonds is *see attached a. P 1,767,120b. P 1,769,640c. P 1,779,120d. P 1,999,200
Bonds Payable has a balance of $987,000 and Premium on Bonds Payable has a balance of $10,857. If the issuing corporation redeems the bonds at 102, what is the amount of gain or loss on redemption? Select the correct answer. a-$10,857 loss b-$8,883 gain c-$10,857 gain d-$8,883 loss
Bonds Payable has a balance of $900,000 and the Premium on Bonds Payable account has a balance of $45,000. The carrying amount of the bonds is: Group of answer choices $945,000 $45,000 $900,000 $855,000
Enumerate the following; 32. Provides for recognition of an equal amount of premium or discount amortization each period. 33. Bonds that mature in one lump sum at a specified future date. 34. Bonds that provide for conversion into some other security at the option of the stockholder. 35. Bonds that mature in a series of installments at future dates. 36. The difference between the face value and the sales price when bonds are sold below their face value. 37. Bonds for which assets are pledged to guarantee repayment. 38. Obligations that are not expected to be paid in cash within one year or the normal operating cycle. 39. Bonds that do not bear interest but instead are sold at significant discounts providing the investor with a total interest payoff at maturity. 40. Costs incurred by the issuer for legal services, printing and engraving, taxes, and underwriting in connection with the sale of a…
Assume bonds payable are amortized using the straight-line amortization method unless stated otherwise. Pricing bonds Bond prices depend on the market rate of interest, stated rate of interest and time. Requirements Compute the price of the following 8% bonds of Country Telecom. a. $100,000 issued at 75.25 $100,000 issued at 94.50 b. $100,000 issued at 103 50 c. $100,000 issued at 94.50 d. $100,000 issued at 103.25 2. Which bond will Country Telecom have to pay the most to retire at maturity? Explain your answer.
◦4. On January 1, 20x1, an entity issues 9%, 3-year, P3,000,000 bonds at a price that reflects a yield rate of 14%. ◦Requirement: ◦Compute for the discount or premium on the bonds on January 1, 20x1.
Bonds Payable has a balance of $908,000 and Premium on Bonds Payable has a balance of $9,988. If the issuing corporation redeems the bonds at 102, what is the amount of gain or loss on redemption? a.$8,172 gain b.$9,988 loss c.$9,988 gain d.$8,172 loss