Corporation issues $400,000, 10%, five-year bonds at 95. The total interest expense over the life of...

Corporation issues $400,000, 10%, five-year bonds at 95. The total interest expense over the life of the bonds is? with explanation

Expert Solution

The bond were issued at discount. These discount will be amortised over the life of the bond on straight line basis and interest expense will consist of Payment made to bond holder at the stated rate plus the amortisation of discount in each period

ekkarill92 answered 4 weeks ago

Jan 1, 2017, Ky Corporation issues $4,000,000 of 10 percent, five year bonds at 92.79. Interest...

Jan 1, 2017, Ky Corporation issues $4,000,000 of 10 percent, five year bonds at 92.79. Interest is paid ANNUALLY, and the effective interest rate of 12% is used for amortization. What amount was received for the bonds? Make Journal entries for the Jan 1 issuance of the bond and the first two interest transactions: December 31, 2017 (accrual) and Dec 31, 2018 (accrual).

Bushman, Inc., issues $400,000 of 9% bonds that pay interest semiannually and mature in 10 years....

Bushman, Inc., issues $400,000 of 9% bonds that pay interest semiannually and mature in 10 years. Compute the bond issue price assuming that the bonds' market rate is: a. 6% per year compounded semiannually. (Use a calculator or Excel for your calculations. Round your answers to the nearest dollar.) Present value of principal repayment $Answer Present value of interest payments $Answer Selling price of bonds $Answer b. 8% per year compounded semiannually. (Use a calculator or Excel for your calculations....

143) On January 2, 2010, Pannabaker Corporation issued $400,000, five-year, 10% bonds when the market rate...

143) On January 2, 2010, Pannabaker Corporation issued $400,000, five-year, 10% bonds when the market rate of interest was 12%. The bonds pay interest annually on December 31. Pannabaker Corporation uses the effective-interest method of amortization and has a year-end of December 31. (Note: present value tables required.) a) Prepare the journal entry on January 2, 2010, to issue the bonds. b) Prepare the journal entry on December 31, 2010, to record the first annual interest payment and the amortization...

On January 1 Dixon Corporation sold $400,000 of 10-year sinking fund bonds. The corporation expects to...

On January 1 Dixon Corporation sold $400,000 of 10-year sinking fund bonds. The corporation expects to earn 15% on the sinking fund balance and is required to deposit $23,000 at the end of each year with the trustee. Record the following entries:a. The first deposit.b. Earnings of $3,450 at the end of first period.c. Payment of bondholders with sinking fund having a balance of $402,000.

cupola fan corporation issued 10% 400,000, 10-year bonds for 385000 on June 30, 2021.

cupola fan corporation issued 10% 400,000, 10-year bonds for 385000 on June 30, 2021. The debt issue costs were 1500. interest is paid semiannually on December 31 and June 30. one year from the issue date (July 1, 2022). the corporation exercised its call privilege and retired the bonds for 395000. the corporation uses the straight-line method both to determine interest expense and to amortize debt issue costs.

On January 1, Year 1, Shine Corporation purchased as an investment $400,000 of 10-year, 8% bonds....

On January 1, Year 1, Shine Corporation purchased as an investment $400,000 of 10-year, 8% bonds. The bonds pay interest semi-annually on June 30 and December 31. The bonds will yield 10% on an annual basis. All amounts are rounded to the nearest dollar. Shine Corporation intends to hold the bonds to maturity and therefore uses the cost/amortized cost model. Shine Corp. follows IFRS. Required Calculate the purchase price of the bond investment. Prepare a bond amortization table for the...

1.If profit after tax and interest is $400,000; interest expense is $50,000 and taxation expense is...

1.If profit after tax and interest is $400,000; interest expense is $50,000 and taxation expense is $84,000; profit before interest and tax is: 2.If the beginning balance of equity is $82,000; the ending balance is $37,000; and the loss for the period is $33,000; how much did the owner withdraw during the period for personal use? 3.The balance sheet usually reports the entity's financial position for both the current period and the previous period. This information is known as:

1. A corporation issues $500,000 of 20-year, 7% bonds dated January 1 at 95. The journal...

1. A corporation issues $500,000 of 20-year, 7% bonds dated January 1 at 95. The journal entry to record the issuance will include Group of answer choices a credit to Bonds Payable for $500,000. a credit to Premiums on Bonds Payable for $25,000. a debit to Interest Expense for $25,000. a credit to Discount on Bonds Payable for $25,000. a debit to Cash for $500,000. 2. If the market interest rate for a bond is higher than the stated interest...

During the current year, Fco1 has total gross income of $10 million, including $400,000 of interest...

During the current year, Fco1 has total gross income of $10 million, including $400,000 of interest income that qualifies as foreign personal holding company income, and $9.6 million of gross income from the sale of goods that Fco1 manufactured in its country of incorporation. Fco2's current year earnings and profits are $30 million, which consists of $40 million of foreign personal holding company income and a $10 million loss from sales of goods that Fco2 manufactured in its country of...

ABC Co. issues $500,000, 10%, 10 year bonds when the prevailing market rate of interest is...

ABC Co. issues $500,000, 10%, 10 year bonds when the prevailing market rate of interest is 9%. The bonds pay interest annually. Compute the issue price of the bonds. I tried 106,418 and 532,205 are wrong answers. ABC Co. issues $500,000, 10%, 10 year bonds when the prevailing market rate of interest is 11%. The bonds pay interest annually. Compute the issue price of the bonds. 470,450 and 470,124 are wrong answers.

Question