Question
In: Accounting
On January 1, 2018, the company had issued $1,200,000 par value, 7%, five-year bonds at a...
On January 1, 2018, the company had issued $1,200,000 par value,
7%, five-year bonds at a price of
$1,251,176. Interest was payable semiannually on June 30 and
December 31. The market rate of interest
was 6% on the date the bond were issued.
On March 1, 2019, the company extinguished 40% of the bonds
outstanding by issuing 15,000 of its
common shares. It also paid in cash all interest due up to March 1,
2019 on these bonds. The market
value of these shares was $36 per share. Assume the company is
using IFRS to account for the bonds.
required:
a] Prepare the journal entry to record the interest expense on the
bonds payable, on December 31, 2018.
b] Prepare the journal entry to record the payment of interest
accrued on the bonds which were retired
on March 1, 2019.
c] Prepare the journal entry to record the early retirement of the
bonds on March 1, 2019
Solutions
ekkarill92 answered 1 year agoRelated Solutions
On January 1, 2018, ABC Inc. had issued $1,200,000 par value, 7%, five-year bonds at a...
On January 1, 2018, ABC Inc. had issued
$1,200,000 par value, 7%, five-year bonds at a
price of $1,251,176. Interest was payable
semiannually on June 30 and
December 31. The market rate of interest was
6% on the date the bond were issued.
On March 1, 2019, ABC Inc. extinguished
40% of the bonds outstanding by issuing
15,000 of its common shares. It also paid in cash
all interest due up to March 1, 2019 on these
bonds. The market...
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Part 1: On January 1 2018, Louis Company issued bonds with a Par Value of $400,000....
Part 1:
On January 1 2018, Louis Company issued bonds with a Par Value
of $400,000. The coupon interest rate on the bond is 10%, and it
has a maturity of 3 years.
Interest is paid semiannually on June
30th and December 31 of each year.
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[5 points]
Value of Bond @ 8% =
_____________________________________
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Part 2:...
Part 1: On January 1 2018, Louis Company issued bonds with a Par Value of $400,000....
Part 1:
On January 1 2018, Louis Company issued bonds with a Par Value
of $400,000. The coupon interest rate on the bond is 10%, and it
has a maturity of 3 years.
Interest is paid semiannually on June
30th and December 31 of each year.
Required:
Compute the value of the bond assuming the following market
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[5 points]
Value of Bond @ 8% =
_____________________________________
Value of Bond @10% =
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Part 2:...
Diaz Company issued $82,000 face value of bonds on January 1, 2018. The bonds had a...
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Required
Use a financial statements model like the one shown below to
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