Question
In: Accounting
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 July 1, 2020 using the effective interest rate method.
Chapter 15
Prepare an Income Statement (including cost of goods sold calculation) and a Statement of Cost of Goods Manufactured for the month ended January 31 in proper form using the following information (note that some balances are missing and must be computed):
(in $000's)
Sales revenue $1,127.0
Cost of goods sold ?
Gross profit ? / Net income ?
Operating expenses (selling and administrative) 117.6
Direct materials inventory January 1 65.8
Direct materials inventory January 31 ?
Direct materials purchased 282.8
Cost of Direct materials used 317.8
Direct labor costs 387.8
FOH costs 148.4
Total manufacturing costs in January ?
Total manufacturing costs 973.0
WIP inventory Janaury 1 119.0
WIP inventory January 31 172.2
Cost of goods manufactured ?
FG inventory January 1 224.0
FG inventory Janaury 31 197.4
Solutions
ekkarill92 answered 2 years agoRelated Solutions
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The issuance of bonds on January 1, 2020.
Accrual of interest and amortization of the discount
on December 31, 2020. (1.5 marks)
The payment of...
On January 1, 2020, Caliber Corporation issued 9% bonds dated January 1, 2020, with a face...
On January 1, 2020, Caliber Corporation issued 9% bonds dated
January 1, 2020, with a face amount of $10 million. The bonds
mature in 2029 (10 years). For bonds of similar risk and maturity,
the market yield is 10%. Interest is paid annually on December
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1. What is the amount of the annual interest payment?
2. What is the price of the bond on the issue date? (state
method used)
3. Was the bond sold at a discount or...
On January 1, 2019, ABC Company issued bonds with a face value of $1,000 and a...
On January 1, 2019, ABC Company issued bonds with a face value
of $1,000 and a coupon rate of 8 percent. The bonds mature in 2
years and pay interest on June 30 and December 31 each year. The
market rate is 12% annually. The present value of $1 table and the
present value of annuity of $1 table are provided on the next page.
Round your final answers to the nearest whole
dollar.
(1) What is the issue price...
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?
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 amount of
interest expense appearing on the income statement for the year
ending December 31, Year 3?
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 amount of
interest expense appearing on the income statement for the year
ending December 31, Year 3?
On January 1, Year 1, Mudpond Company issued bonds with a $400,000 face value, a stated...
On January 1, Year 1, Mudpond Company issued bonds with a
$400,000 face value, a stated rate of interest of 5%, and a 10-year
term to maturity. The bonds sold for $432,444. Mudpond uses the
effective interest method to amortize bond discounts and premiums.
The market rate of interest on the date of issuance was 4%.
Interest is paid annually on December 31.
REQUIRED:
Complete the amortization schedule below:
Cash Payment
Interest Expense
Amortization
Carrying Value
1/1/Year 1
12/31/Year 1...
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