Sparks Company received proceeds of $634,500 on 10-year, 8% bonds issued on January 1, 2016. The...

Sparks Company received proceeds of $634,500 on 10-year, 8% bonds issued on January 1, 2016. The bonds had a face value of $600,000, pay interest annually on December 31st, and have a call price of 102. Sparks uses the straight-line method of amortization. Sparks Company decided to redeem the bonds on January 1, 2018. What amount of gain or loss would Sparks report on their 2018 income statement?

		$27,600 gain
		$15,600 gain
		$15,600 loss
		$27,600 loss

Expert Solution

ekkarill92 answered 5 months ago

On January 1, a company issued and sold a $407,000, 8%, 10-year bond payable, and received...

On January 1, a company issued and sold a $407,000, 8%, 10-year bond payable, and received proceeds of $402,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The journal entry to record the first interest payment is: Multiple Choice Debit Bond Interest Expense $16,530; credit Cash $16,280; credit Discount on Bonds Payable $250. Debit Bond Interest Expense $32,560; credit Cash $32,560. Debit Bond Interest Expense $16,030; debit Discount on...

On January 1, 2016, Sayers Company issued $181,000 of five-year, 8 percent bonds at 104. Interest...

On January 1, 2016, Sayers Company issued $181,000 of five-year, 8 percent bonds at 104. Interest is payable semiannually on June 30 and December 31. The premium is amortized using the straight-line method. No Date General Journal Debit Credit 1 Jan 01, 2016 Cash 188,240 Premium on bonds payable 7,240 Bonds payable 181,000 2 Jun 30, 2016 Interest expense Premium on bonds payable 724 Cash 3 Dec 31, 2016 Interest expense Premium on bonds payable 724 Cash 4 Jun...

On January 1,2021, Apple Company issued $840,000 of 8%,10-year bonds for 97.

On January 1,2021, Apple Company issued $840,000 of 8%,10-year bonds for 97. Apple retired all of these bonds on January 1,2022, at 102. If Apple uses the straight-line amortization, how much loss should be recognized on this bond retirement?

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.

PROBLEM 5: ON JANUARY 1, 2016 SMITH COMPANY ISSUED 8%, 20-YEAR BONDS PAYABLE WITH FACE VALUE...

PROBLEM 5: ON JANUARY 1, 2016 SMITH COMPANY ISSUED 8%, 20-YEAR BONDS PAYABLE WITH FACE VALUE OF $300,000. THE BONDS PAY INTEREST ON JUNE 30 AND DECEMBER 31. THE ISSUE PRICE OF THE BONDS IS 98. INSTRUCTIONS: JOURNALIZE THE FOLLOWING BOND TRANSACTIONS: A) ISSUANCE OF THE BONDS ON JANUARY 1, 2016 B) PAYMENT OF INTEREST AND AMORTIZATION ON JUNE 30, 2016

McGee Company issued $400,000 of 8%, 10-year bonds on January 1, 2017. Interest is payable semiannually...

McGee Company issued $400,000 of 8%, 10-year bonds on January 1, 2017. Interest is payable semiannually on July 1 and January 1. Mcgee Company uses the effective interest method of amortization for bond premium or discount. Assume an effective yield of 6% in Pricing the bond. Prepare the journal entries to record the following (round to the nearest dollar.) The issuance of the bonds. The payment of interest and related amortization July 1. The accrual of interest and the related...

Schmidt Company issued $ 260,000, 8%, 10-year bonds payable at 92 on January 1, 2018. Journalize...

Schmidt Company issued $ 260,000, 8%, 10-year bonds payable at 92 on January 1, 2018. Journalize the issuance of the bonds payable on January 1, 2018. 7. Journalize the payment of semiannual interest and amortization of the bond discount or premium (using the straight-line amortization method) on July 1, 2018. 8. Assume the bonds payable was instead issued at 106. Journalize the issuance of the bonds payable and the payment of the first semiannual interest and amortization of the bond...

On January 1, 2016, Gless Textiles issued $21 million of 10%, 10-year convertible bonds at 101....

On January 1, 2016, Gless Textiles issued $21 million of 10%, 10-year convertible bonds at 101. The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 40 shares of Gless’s no par common stock. Bonds that are similar in all respects, except that they are nonconvertible, currently are selling at 99 (that is, 99% of face amount). Century Services purchased 15% of the issue as an investment. Required: 1. Prepare the journal entries for...

Eureka Company issued $290,000 in bonds payable on January 1, 2016. The bonds were issued at...

Eureka Company issued $290,000 in bonds payable on January 1, 2016. The bonds were issued at face value and carried 4-year term to maturity. They had a 5% stated rate of interest that was payable in cash on January 1st of each year beginning January 1, 2017. Based on this information, the amount of total liabilities appearing on the December 31, 2016 balance sheet would be: $290,000. $288,550. $304,500. $14,500.

on January 1, year 2, London corporation issued a 10 year $500,000, 8%, bonds payable that...

on January 1, year 2, London corporation issued a 10 year $500,000, 8%, bonds payable that pays interest semi-annually on July 1 and January 1. on January 1, year 2, it is determined that the market rate of bond was 10%. what is the amount of cash received from the insurance of the 8% bond at the market rate of 10%?

Question