Question
In: Accounting
On January 1, 2020, Ironman Steel issued $900,000, 8-year bonds for $990,000. The stated rate of...
-
On January 1, 2020, Ironman Steel issued $900,000, 8-year bonds for $990,000. The stated rate of interest was 9% and interest is paid annually on December 31.
Required:
Prepare the amortization table for Ironman Steel's bonds. If required, round your answers to nearest whole value. If an amount box does not require an entry, leave it blank and if the answer is zero, enter "0".
Ironman Steel Amortization Table Period Cash Payment (Credit) Interest Expense (Debit) Premium on Bonds Payable (Debit) Premium on Bonds Payable Balance Carrying Value At issue $ $ $ $ $ 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 12/31/26 12/31/27 An amortization table helps calculate the proper amortization of bond premium or discount. They are particularly helpful when the effective interest rate method is used; however, this problem amortizes the premium using the straight-line method.
Solutions
Expert Solution
| Face Value of bonds | 900,000.00 | ||||
| Issue price | 990,000.00 | ||||
| Premium on bonds | 90,000.00 | ||||
| Ironman Steel | |||||
| Amortization Table | |||||
| Period | Cash Payment (Credit) =900,000*9% | Interest Expense (Debit) | Premium on Bonds Payable (Debit) | Premium on Bonds Payable Balance | Carrying Value |
| At issue | $ | $ | 90,000.00 | 990,000.00 | |
| 12/31/2020 | 81,000.00 | 69,750.00 | 11,250.00 | 78,750.00 | 978,750.00 |
| 12/31/2021 | 81,000.00 | 69,750.00 | 11,250.00 | 67,500.00 | 967,500.00 |
| 12/31/2022 | 81,000.00 | 69,750.00 | 11,250.00 | 56,250.00 | 956,250.00 |
| 12/31/2023 | 81,000.00 | 69,750.00 | 11,250.00 | 45,000.00 | 945,000.00 |
| 12/31/2024 | 81,000.00 | 69,750.00 | 11,250.00 | 33,750.00 | 933,750.00 |
| 12/31/2025 | 81,000.00 | 69,750.00 | 11,250.00 | 22,500.00 | 922,500.00 |
| 12/31/2026 | 81,000.00 | 69,750.00 | 11,250.00 | 11,250.00 | 911,250.00 |
| 12/31/2027 | 81,000.00 | 69,750.00 | 11,250.00 | - | 900,000.00 |
| Note - Assumed straight line method of depreciation | |||||
ekkarill92 answered 6 months agoRelated Solutions
On January 1, 2014, Partridge Advertising Company issued $50,000 of 6-year bonds with a stated rate...
On January 1, 2014, Partridge Advertising Company issued $50,000
of 6-year bonds with a stated rate of 3%. The market rate at time
of issue was 4%, so the bonds were discounted and sold for $47,356.
Partridge uses the effective-interest method of amortization for
bond discount. Semiannual interest payments are made on June 30 and
December 31 of each year. Prepare the amortization table for the
first four interest payments. (Round your answers to nearest dollar
number.)
On January 1, 2020, Bristol Corporation issued one 3-year, 10% (stated rate), $20,000 bond at a...
On January 1, 2020, Bristol Corporation issued one 3-year, 10%
(stated rate), $20,000 bond at a price which would yield the
purchaser an 9% return. Payment of interest is made on December 31.
The year end is December 31. The company uses the ‘effective
interest’ method to account for bond interest.
Prepare the entry to record the sale of the bond on January 1,
2020.
Prepare a bond amortization schedule in good form for the
bond.
Prepare the entry on...
XYZ Corporation issued bonds on January 1, 2020 with a face value of $1,000, 10% stated...
XYZ Corporation issued bonds on January 1, 2020 with a face
value of $1,000, 10% stated interest rate, with semi-annual
payments, and a maturity date of December 31, 2024 (4 years). The
market interest rate is 8%.
Required: (Answers may be rounded to the nearest dollar)
1. Compute the market price of the bonds and the journal entry
to record issuance of the bonds on January 1, 2020. 2. Record the
journal entry for the first semi-annual interest payment on...
J-BOND CO issued 700,000 of 8 year bonds at a stated rate of 4% when the...
J-BOND CO issued 700,000 of 8 year bonds at a stated rate of 4%
when the market rate of interest was 5%. The bonds were issued on
July 1 and paid interest semi-annually.
The issue price of the bonds is
The bonds were issued at (premium, discount, par)
The entry to record interest expense for period 7 is
( you may use clear abbreviations for the account names)
If the company were to repurchase the bonds at 97 at the...
On january 1, 2017, A company issued 12% stated rate bonds with a face amount of...
On january 1, 2017, A company issued 12% stated rate bonds with a face amount of $200 million. The bonds mature on january 1, 2027 and market rate was 14%.
Please answer the following:
1.n=
2.i=
3.Total present value of interest payment=
4.Total present value of principal=
5.Total price of bonds=
on January 1, 2016 North Company issued $2000000 of bonds with a stated rate of 10%...
on
January 1, 2016 North Company issued $2000000 of bonds with a
stated rate of 10% that are due to mature December 31, 2025, and
pay interest semiannually. The market rate of interest was 9% at
the date of issuance. Prepare the journal entry for the sale of the
bonds on January 1, 2016. Prepare a Amortization
schedule.
On January 1, 2021, NFB Visual Aids issued $900,000 of its 20-year, 10% bonds. The bonds...
On January 1, 2021, NFB Visual Aids issued $900,000 of its
20-year, 10% bonds. The bonds were priced to yield 12%. Interest is
payable semiannually on June 30 and December 31. NFB Visual Aids
records interest expense at the effective rate and elected the
option to report these bonds at their fair value. On December 31,
2021, the fair value of the bonds was $768,000 as determined by
their market value in the over-the-counter market. General
(risk-free) interest rates did...
On January 1, 2018, NFB Visual Aids issued $900,000 of its 20-year, 10% bonds. The bonds...
On January 1, 2018, NFB Visual Aids issued $900,000 of its
20-year, 10% bonds. The bonds were priced to yield 12%. Interest is
payable semiannually on June 30 and December 31. NFB Visual Aids
records interest expense at the effective rate and elected the
option to report these bonds at their fair value. On December 31,
2018, the fair value of the bonds was $768,000 as determined by
their market value in the over-the-counter market. General
(risk-free) interest rates did...
On January 1, Year 1, Victor Company issued bonds with a $650,000 face value, a stated...
On January 1, Year 1, Victor Company issued bonds with a
$650,000 face value, a stated rate of interest of 6%, and a 5-year
term to maturity. The bonds sold at 95. Interest is payable in cash
on December 31 of each year. Victor uses the straight-line method
to amortize bond discounts and premiums. What is the carrying value
of the bond liability at December 31, Year 3?
On January 1, Year 1, Victor Company issued bonds with a $750,000 face value, a stated...
On January 1, Year 1, Victor Company issued bonds with a
$750,000 face value, a stated rate of interest of 5%, and a 5-year
term to maturity. The bonds sold at 96. Interest is payable in cash
on December 31 of each year. Victor uses the straight-line method
to amortize bond discounts and premiums. What is the carrying value
of the bond liability at December 31, Year 3?
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- An asset is purchased on January 1 for $48,700. It is expected to have a useful...
- Do we have any online or offline tool to convert c and cpp programs into MIPS...
- -what is the pH of HCl 0,1M and NaCl 0,1M mixed together solution? -What is the...
- function X=extractDWT(x_train,startS,endS,wStep,wRange) % x_train = input signal % startS = from second % endS = end...
- Do you agree that Social Loafing is similar to Theory X. Give an example to support...
- Computing Cost of Goods Sold and Ending Inventory. Bartov Corporation reports the following beginning inventory and...
- SQL FORMAT (11-13 are completed and correct) -- 11. what are the names of all students...
ADVERTISEMENT