The Mesino Corporation issues $80,000, 5%, 5-year bonds on January 1, for $83,200. Interest is paid...

The Mesino Corporation issues $80,000, 5%, 5-year bonds on January 1, for $83,200. Interest is paid semiannually on January 1 and July 1. If Mesino uses the straight-line method of amortization of bond premium, the amount of bond interest expense to be recognized on July 1 is

	a.	$2,000
	b.	$4,000
	c.	$1,680
	d.	$3,360

Expert Solution

Correct Option C i.e. $1680

Interest Payment	2,000	(800005%)6 Months/12 Months
Less: AMORTIZATION OF PREMIUM	(320)	(Note1 )

Interest Expense to be recognized	1,680


Note 1:

Calculation of Premium amount

Issue Value	83,200
Less: face Value	80,000

Premium Amount	3,200

No. of Semiannual	10

Amortization of premium per semiannual	320	(3200/10)

ekkarill92 answered 2 years ago

On January 1, Hurley Corporation issues $2,500,000, 5-year, 12% bonds at 96 with interest payable on...

On January 1, Hurley Corporation issues $2,500,000, 5-year, 12% bonds at 96 with interest payable on July 1 and January 1. The entry on December 31 to record accrued bond interest and the amortization of bond discount using the straight-line method will include a debit to Interest Expense, $150,000. debit to Interest Expense, $300,000. credit to Discount on Bonds Payable, $10,000. credit to Discount on Bonds Payable, $20,000. A corporation issues $1,000,000,000, 10%, 5-year bonds on January 1, 2014, for...

1. On January 1, 2019, Always Corporation issues $3,100,000, 5−year, 12% bonds for $3,010,000. Interest is...

1. On January 1, 2019, Always Corporation issues $3,100,000, 5−year, 12% bonds for $3,010,000. Interest is paid semiannually on January 1 and July 1. Always Corporation uses the straight−line method of amortization. The company's fiscal year ends on December 31. The amount of discount amortized on July 1, 2019 is: 2. Williamson Company declared and distributed a 10% stock dividend when it had 900,000 shares of $1 par value common stock outstanding. The market price per share of common stock...

A company issues $896,000 of 5-year, 5% bonds on January 1, 2021. The bonds pay interest...

A company issues $896,000 of 5-year, 5% bonds on January 1, 2021. The bonds pay interest annually. 1) Calculate the issue price of the bonds using a market rate of 4% 2) Record the bond issue 3) Prepare an effective interest amortization table for the bonds 4) Prepare the journal entries to record the first three interest payments. Ignore any year-end accruals of interest 5) Assuming the company has an October 31 year end, prepare the adjusting entry for interest...

Cronos issues $3,000,000, 7.6%, 10-year bonds to yield 8% on January 1, 2016. Interest is paid...

Cronos issues $3,000,000, 7.6%, 10-year bonds to yield 8% on January 1, 2016. Interest is paid on June 30 and Cronos issues $3,000,000, 7.6%, 10-year bonds to yield 8% on January 1, 2016. Interest is paid on June 30 and December 31. The proceeds from the bonds are $2,918,468. Using effective-interest method of amortization, what will the carrying value of bonds be on the December 31, 2017 balance sheet?

On January 1 st 2012, Everhart Corporation, a calendar year company issues $100,000, 5%, 5-year bonds...

On January 1 st 2012, Everhart Corporation, a calendar year company issues $100,000, 5%, 5-year bonds dated January 1, 2012. The bond pays interest semiannually on January 1 and July 1 . The bonds are issued to yield 6%.

On January 1, Year 1, Camdenton Corporation issues $100,000 of 5% bonds maturing in 10 years...

On January 1, Year 1, Camdenton Corporation issues $100,000 of 5% bonds maturing in 10 years when the market rate of interest is 4%. Interest is paid semiannually on June 30 and December 31. When using the PV function in Excel to compute the issue price of the bonds, the applicable interest payment (“PMT”) is: a. 2500 b. 4000 c. 5000

On January 1, 2019 Lightfoot Corporation issues 10%, 5-year bonds with a face value of $275,000...

On January 1, 2019 Lightfoot Corporation issues 10%, 5-year bonds with a face value of $275,000 when the effective interest rate is 9%. Interest is to be paid semiannually on June 30 and December 31. Lightfoot uses the effective interest method to amortize the premium on June 30, 2019. Prepare the journal entry to record the first interest payment on June 30, 2019.

Legacy issues $325,000 of 5%, four-year bonds dated January 1, 2017, that pay interest semiannually on...

Legacy issues $325,000 of 5%, four-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. They are issued at $292,181 and their market rate is 8% at the issue date. Required: 1. Prepare the January 1, 2017, journal entry to record the bonds' issuance. 2. Complete the below table to calculate the total bond interest expense to be recognized over the bonds’ life. 3. Prepare an effective interest amortization table for the bonds’...

Hillside issues $1,400,000 of 5%, 15-year bonds dated January 1, 2019, that pay interest semiannually on...

Hillside issues $1,400,000 of 5%, 15-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,713,594. Required: 1. Prepare the January 1 journal entry to record the bonds’ issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line premium amortization. 2(c) For each semiannual period, complete the table...

Hillside issues $1,400,000 of 5%, 15-year bonds dated January 1, 2017, that pay interest semiannually on...

Hillside issues $1,400,000 of 5%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,713,594. Required: 1. Prepare the January 1, 2017, journal entry to record the bonds’ issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line premium amortization. 2(c) For each semiannual period, complete the...

Question