Mo’s Motor Corp. issued $230,000 of 8%, 5-year bonds on April 1, 2021. Interest is payable...

Mo’s Motor Corp. issued $230,000 of 8%, 5-year bonds on April 1, 2021. Interest is payable semi-annually on April 1 and October 1. On April 1, 2023, immediately after making and recording the semi-annual interest payment, Mo’s redeemed the bonds. Below is a partial amortization schedule for the first few years of the bond issue.

Mo's Motor Corp. Bond Discount Amortization Schedule
Interest Period		Interest Payment	Interest Expense	Amortization	Bond Amortized Cost
01-Apr.	2021				$220,900.37
01-Oct.	2021	$9,200.00	$9,940.52	$740.52	221,640.89
01-Apr.	2022	9,200.00	9,973.84	773.84	222,414.73
01-Oct.	2022	9,200.00	10,008.66	808.66	223,223.39
01-Apr.	2023	9,200.00	10,045.05	845.05	224,068.44

1) Were the bonds issued at a discount or at a premium?

The bonds were issued at a

2)What is the bond’s face value?

Face value

3) Prepare the journal entry to record the payment of interest on Oct 1, 2021? (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 2 decimal places, e.g. 5,275.25.)

Date	Account Titles and Explanation	Debit	Credit
Oct. 1, 2021

4) Prepare the journal entry to record the redemption of the bonds assuming they were redeemed at 100. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 2 decimal places, e.g. 5,275.25.)

Date	Account Titles and Explanation	Debit	Credit
Apr. 1, 2023

5)

Prepare the journal entry to record the redemption of the bonds assuming they were redeemed at 96. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 2 decimal places, e.g. 5,275.25.)

Date	Account Titles and Explanation	Debit	Credit
Apr. 1, 2023

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

On May 1, 2021, Oriole Corp. issued $855,000 of 5-year, 8% bonds at 98. The bonds...

On May 1, 2021, Oriole Corp. issued $855,000 of 5-year, 8% bonds at 98. The bonds pay interest annually on May 1. Oriole's year end is April 30. Record the issue of the bonds on May 1, 2021. Date Account Titles and Explanation Debit Credit May 1 Calculate the effective rate of the bonds using Excel or a financial calculator. (Round answer to 4 decimal places, e.g. 1.5751.) Effective rate % Prepare an effective interest amortization table for this bond....

Crane issued $370,000 of 5%, 5-year bonds on January 1, 2021. Interest is payable semi-annually. Calculate...

Crane issued $370,000 of 5%, 5-year bonds on January 1, 2021. Interest is payable semi-annually. Calculate the price of the bond: (a) 4%, (b) 5%, and (c) 6%. Prepare the journal entry to record the issuance of the bond assuming the market rate of interest is: (a) 4%, (b) 5%, and (c) 6%.

Blossom issued $360,000 of 5%, 5-year bonds on January 1, 2021. Interest is payable semi-annually. Calculate...

Blossom issued $360,000 of 5%, 5-year bonds on January 1, 2021. Interest is payable semi-annually. Calculate the price of the bond: (a) 4%, (b) 5%, and (c) 6%. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answer to 0 decimal places, e.g. 5,275.) Click here to view the factor table. Present Value of 1 Click here to view the factor table. Present Value of an Annuity of 1 (a) Market interest rate...

Wildhorse issued $470,000 of 5%, 5-year bonds on January 1, 2021. Interest is payable semi-annually. Calculate...

Wildhorse issued $470,000 of 5%, 5-year bonds on January 1, 2021. Interest is payable semi-annually. Calculate the price of the bond: (a) 4%, (b) 5%, and (c) 6%. (a) Market interest rate 4% $enter a dollar amount rounded to 0 decimal places (b) Market interest rate 5% $enter a dollar amount rounded to 0 decimal places (c) Market interest rate 6% $enter a dollar amount rounded to 0 decimal places Prepare the journal entry to record the issuance of the...

On December 31, 2015, Jenna Corp issued $1,000,000, 8%, 5-year bonds. Interest is payable semi-annually on...

On December 31, 2015, Jenna Corp issued $1,000,000, 8%, 5-year bonds. Interest is payable semi-annually on June 30 and December 31. The corporation uses the effective interest method of amortizing bond premium or discount. Required a. Using the present value tables, estimate the issue price of the bonds under the following three assumptions: i. Market Rate is 8% ii. Market Rate is 6% iii. Market Rate is 10% b. Prepare the journal entries for each of the assumptions

On January 1, 2021, Winter Company issued $500,000, 5-year, 8% bonds at 97. Interest is paid...

On January 1, 2021, Winter Company issued $500,000, 5-year, 8% bonds at 97. Interest is paid semiannually on each June 30 and December 31. The maturity date is December 31, 2025. How much Bond Interest Expense will the company record on each semiannual cash interest payment date?

On May 1, 2021, Sunland Corp. issued $870,000 of 5-year, 7% bonds at 96. The bonds...

On May 1, 2021, Sunland Corp. issued $870,000 of 5-year, 7% bonds at 96. The bonds pay interest annually on May 1. Sunland's year end is April 30. Record the issue of the bonds on May 1, 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit May 1...

On December 31, 2019, Repsol Corp issued $1,400,000, 9%, 5-year bonds. Interest is payable semiannually on...

On December 31, 2019, Repsol Corp issued $1,400,000, 9%, 5-year bonds. Interest is payable semiannually on June 30 and December 31. The corporation uses the effective interest method of amortizing bond premium or discount. Using a financial calculator or excel, estimate the issue price of the bonds under the following three assumptions: (1) Market Rate is 9% (2) Market Rate is 8%

On October 1, 2021, Sarasota Corp. issued $888,000, 5%, 10-year bonds at face value. The bonds...

On October 1, 2021, Sarasota Corp. issued $888,000, 5%, 10-year bonds at face value. The bonds were dated October 1, 2021, and pay interest annually on October 1. Financial statements are prepared annually on December 31. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Oct. 1, 2021 enter an account title for the journal entry on...

On October 1, 2021, Ayayai Corp. issued $720,000, 5%, 10-year bonds at face value. The bonds...

On October 1, 2021, Ayayai Corp. issued $720,000, 5%, 10-year bonds at face value. The bonds were dated October 1, 2021, and pay interest annually on October 1. Financial statements are prepared annually on December 31. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Oct. 1, 2021 enter an account title for the journal entry on...

Subjects