Question
In: Accounting
Bond Discount, Entries for Bonds Payable Transactions On July 1, 20Y1, Livingston Corporation, a wholesaler of...
Bond Discount, Entries for Bonds Payable Transactions
On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $1,500,000 of 10-year, 11% bonds at a market (effective) interest rate of 12%, receiving cash of $1,413,968. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Required:
For all journal entries, if an amount box does not require an entry, leave it blank.
1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.
2. Journalize the entries to record the following:
a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar.
b. The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar.
3. Determine the total interest expense for 20Y1. Round to the
nearest dollar.
$
4. Will the bond proceeds always be less than the face amount of
the bonds when the contract rate is less than the market rate of
interest?
5. Compute the price of $1,413,968 received for the bonds by using the present value tables in Appendix A. Round your PV values to 5 decimal places and the final answers to the nearest dollar. Your total may vary slightly from the price given due to rounding differences.
Present value of the face amount$
Present value of the semiannual interest payments
Price received for the bonds$
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Bond Discount, Entries for Bonds Payable Transactions On July 1, 20Y1, Livingston Corporation, a wholesaler of...
Bond Discount, Entries for Bonds Payable Transactions
On July 1, 20Y1, Livingston Corporation, a wholesaler of
manufacturing equipment, issued $1,500,000 of 10-year, 11% bonds at
a market (effective) interest rate of 12%, receiving cash of
$1,413,968. Interest on the bonds is payable semiannually on
December 31 and June 30. The fiscal year of the company is the
calendar year.
Required:
For all journal entries, if an amount box does not require an
entry, leave it blank.
1. Journalize the entry...
Bond Discount, Entries for Bonds Payable Transactions On July 1, 20Y1, Livingston Corporation, a wholesaler of...
Bond Discount, Entries for Bonds Payable Transactions
On July 1, 20Y1, Livingston Corporation, a wholesaler of
manufacturing equipment, issued $1,700,000 of 8-year, 8% bonds at a
market (effective) interest rate of 10%, receiving cash of
$1,515,755. Interest on the bonds is payable semiannually on
December 31 and June 30. The fiscal year of the company is the
calendar year.
Required:
For all journal entries, if an amount box does not require an
entry, leave it blank.
1. Journalize the entry...
Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1, Livingston Corporation, a wholesaler...
Bond Discount, Entries for Bonds Payable Transactions
On July 1, Year 1, Livingston Corporation, a wholesaler of
manufacturing equipment, issued $3,800,000 of 8-year, 10% bonds at
a market (effective) interest rate of 11%, receiving cash of
$3,601,220. Interest on the bonds is payable semiannually on
December 31 and June 30. The fiscal year of the company is the
calendar year.
Required:
1. Journalize the entry to record the amount of
cash proceeds from the issuance of the bonds on July...
Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1, Livingston Corporation, a wholesaler...
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$5,012,800. Interest on the bonds is payable semiannually on
December 31 and June 30. The fiscal year of the company is the
calendar year.
Required:
1. Journalize the entry to record the amount of
cash proceeds from the issuance of the bonds on July...
Bond Discount, Entries for Bonds Payable Transactions? On July 1, Year 1, Livingston Corporation, a wholesaler...
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On July 1, Year 1, Livingston Corporation, a wholesaler of
manufacturing equipment, issued $8,600,000 of 10-year, 8% bonds at
a market (effective) interest rate of 10%, receiving cash of
$7,528,249. Interest on the bonds is payable semiannually on
December 31 and June 30. The fiscal year of the company is the
calendar year.
Required:
1. Journalize the entry to record the amount of
cash proceeds from the issuance of the bonds on July...
Bond Discount, Entries for Bonds Payable Transactions, Interest Method of Amortizing Bond Discount On July 1,...
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On July 1, 20Y1, Livingston Corporation, a wholesaler of
manufacturing equipment, issued $30,000,000 of 20-year, 11% bonds
at a market (effective) interest rate of 14%, receiving cash of
$24,001,800. Interest on the bonds is payable semiannually on
December 31 and June 30. The fiscal year of the company is the
calendar year.
Required:
For all journal entries, if an amount box does not require an
entry, leave...
Bond Discount, Entries for Bonds Payable Transactions, Interest Method of Amortizing Bond Discount On July 1,...
Bond Discount, Entries for Bonds Payable Transactions, Interest
Method of Amortizing Bond Discount On July 1, 20Y1, Livingston
Corporation, a wholesaler of manufacturing equipment, issued
$37,000,000 of 20-year, 11% bonds at a market (effective) interest
rate of 14%, receiving cash of $29,602,220. Interest on the bonds
is payable semiannually on December 31 and June 30. The fiscal year
of the company is the calendar year. Required: For all journal
entries, if an amount box does not require an entry, leave...
Solve the following problem. Bond discount, entries for bonds payable transactions On July 1, Year 1,...
Solve the following problem.
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On July 1, Year 1, Danzer Industries Inc. issued $43,200,000 of
10-year, 9% bonds at a market (effective) interest rate of 10%,
receiving cash of $40,508,184. Interest on the bonds is payable
semiannually on December 31 and June 30. The fiscal year of the
company is the calendar year.
Required:
1.
Journalize the entry to record
the amount of cash proceeds from the issuance of the bonds on July...
Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1, Danzer Industries Inc. issued...
Bond Discount, Entries for Bonds Payable Transactions
On July 1, Year 1, Danzer Industries Inc. issued $1,200,000 of
5-year, 9% bonds at a market (effective) interest rate of 10%,
receiving cash of $1,153,665. Interest on the bonds is payable
semiannually on December 31 and June 30. The fiscal year of the
company is the calendar year.
Required:
1. Journalize the entry to record the amount of
cash proceeds from the issuance of the bonds on July 1, Year 1. If...
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On July 1, Year 1, Danzer Industries Inc. issued $6,900,000 of
7-year, 10% bonds at a market (effective) interest rate of 11%,
receiving cash of $6,569,162. Interest on the bonds is payable
semiannually on December 31 and June 30. The fiscal year of the
company is the calendar year.
Required:
1. Journalize the entry to record the amount of
cash proceeds from the issuance of the bonds on July 1, Year 1. If...
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