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 2 years 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...
On January 1, 2018, General Bell Company issued $1,200,000 par value, 8%, five-year bonds while the...
On January 1, 2018, General Bell Company issued $1,200,000 par
value, 8%, five-year bonds while the effective rate is 12%. The
bonds are dated January 1, 2018. The interests are payable
semiannually each June 30 and December 31. On January 1, 2020,
General Bell calls half the issue at 101 and cancels it. Write all
necessary journal entries.
Golf World, Inc., issued $320,000 par value 9% five-year bonds dated January 1, 2018 that will...
Golf World, Inc.,
issued $320,000 par value 9% five-year bonds dated January 1,
2018 that will pay
interest semiannually on June 30 and December 31. These bonds were
issued
at $332,989. The
annual market rate is 8% on the issue date.
How can
complete for 4 and 5 requirement information from above: Please
including formulas and calculation.
4.
Golf World decided to retire the bonds early on January 1, 2020, at
105. Prepare the necessary journal entries to record this...
On January 1 2016, Natually Good Products issued $900,000 par value, 7%, five year bonds. Interest...
On January 1 2016, Natually Good Products issued $900,000 par
value, 7%, five year bonds. Interest is payable semiannually at the
end of the period. The market rate of interest on the date of the
bond issue was 6%. The company's fiscal year ends on dec 31.
a) Determine issue price of debt.
b) Prepare Journal entry Record issuance of bonds payable.
Record first semiannual interest payment. Record payment of the
bonds at maturity.
Now, Prepare the journal entry to...
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
rates of interest:
[5 points]
Value of Bond @ 8% =
_____________________________________
Value of Bond @10% =
_____________________________________
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
rates of interest:
[5 points]
Value of Bond @ 8% =
_____________________________________
Value of Bond @10% =
_____________________________________
Part 2:...
Diaz Company issued $82,000 face value of bonds on January 1, 2018. The bonds had a...
Diaz Company issued $82,000 face value of bonds on January 1,
2018. The bonds had a 7 percent stated rate of interest and a
ten-year term. Interest is paid in cash annually, beginning
December 31, 2018. The bonds were issued at 96. The straight-line
method is used for amortization.
Required
Use a financial statements model like the one shown below to
demonstrate how (1) the January 1, 2018, bond issue and (2) the
December 31, 2018, recognition of interest expense,...
Diaz Company issued $80,000 face value of bonds on January 1, 2018. The bonds had a...
Diaz Company issued $80,000 face value of bonds on January 1,
2018. The bonds had a 6 percent stated rate of interest and a
ten-year term. Interest is paid in cash annually, beginning
December 31, 2018. The bonds were issued at 98. The straight-line
method is used for amortization. Required a. Use a financial
statements model like the one shown below to demonstrate how (1)
the January 1, 2018, bond issue and (2) the December 31, 2018,
recognition of interest...
Diaz Company issued $101,000 face value of bonds on January 1, 2018. The bonds had a...
Diaz Company issued $101,000 face value of bonds on January 1,
2018. The bonds had a 8 percent stated rate of interest and a
ten-year term. Interest is paid in cash annually, beginning
December 31, 2018. The bonds were issued at 99. The straight-line
method is used for amortization.
Required
Use a financial statements model like the one shown below to
demonstrate how (1) the January 1, 2018, bond issue and (2) the
December 31, 2018, recognition of interest expense,...
Problem 1: On January 1, Altman Company issued bonds that had a par value of $860,000...
Problem 1:
On January 1, Altman Company issued bonds that had a par value
of $860,000 with a stated interest rate of 5% and a 5 year maturity
date. The bonds pay interest semiannually on June 30 and December
31.
The bonds are issued at 103 3/4.
a) Prepare the journal entries Altman Company must record in its
books at bond issuance, the first interest payment date, and at
bond maturity. Altman Company uses the straight line method to
amortize...
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