The Sage Company issued $230,000 of 12% bonds on January 1, 2017. The bonds are due...

The Sage Company issued $230,000 of 12% bonds on January 1, 2017. The bonds are due January 1, 2022, with interest payable each July 1 and January 1. The bonds were issued at 102. Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Sage Company records straight-line amortization semiannually.

Expert Solution

Face Value of Bonds	230,000.00
Money received on issue = 200,000*102%	234,600.00
Premium on Issue of bonds= 234,600 - 230,000	4,600.00
No of periods	10.00
Premium written off every half years = 4600/10	460.00

Journal Entries
Date	Particulars	Dr Amt	Cr Amt
Jan 01 '2017	Cash A/C Dr	234,600.00
	To Bonds Payable		230,000.00
	To Premium on Bonds payable		4,600.00

Jul 01 '2017	Interest Expense Dr	13,340.00
	Premium on Bonds Payable Dr	460.00
	To Cash		13,800.00
	(230,00012%1/2)
Dec 31'2017	Interest Expense Dr	13,340.00
	Premium on Bonds Payable Dr	460.00
	To Interest payable		13,800.00

ekkarill92 answered 1 year ago

The Sage Company issued $300,000 of 13% bonds on January 1, 2017. The bonds are due...

The Sage Company issued $300,000 of 13% bonds on January 1, 2017. The bonds are due January 1, 2022, with interest payable each July 1 and January 1. The bonds were issued at 97. Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Sage Company records straight-line amortization semiannually.

The Swifty Company issued $300,000 of 10% bonds on January 1, 2017. The bonds are due...

The Swifty Company issued $300,000 of 10% bonds on January 1, 2017. The bonds are due January 1, 2022, with interest payable each July 1 and January 1. The bonds were issued at 99. Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Swifty Company records straight-line amortization semiannually. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically...

The Vaughn Company issued $320,000 of 8% bonds on January 1, 2017. The bonds are due...

The Vaughn Company issued $320,000 of 8% bonds on January 1, 2017. The bonds are due January 1, 2022, with interest payable each July 1 and January 1. The bonds are issued at face value. Prepare Vaughn’s journal entries for (a) the January issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically...

The Pearl Company issued $310,000 of 10% bonds on January 1, 2017. The bonds are due...

The Pearl Company issued $310,000 of 10% bonds on January 1, 2017. The bonds are due January 1, 2022, with interest payable each July 1 and January 1. The bonds were issued at 96. Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Pearl Company records straight-line amortization semiannually. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically...

The Splish Company issued $210,000 of 9% bonds on January 1, 2017. The bonds are due...

The Splish Company issued $210,000 of 9% bonds on January 1, 2017. The bonds are due January 1, 2022, with interest payable each July 1 and January 1. The bonds were issued at 96. Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Splish Company records straight-line amortization semiannually. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically...

On January 1, 2017, Bishop Company issued 12% bonds dated January 1, 2017, with a face...

On January 1, 2017, Bishop Company issued 12% bonds dated January 1, 2017, with a face amount of $20 million. The bonds mature in 10 years. For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. 1. Determine the price of the bonds at January 1, 2017 2. Prepare the journal entry to record the bond issuance by Bishop on January 1, 2017. 3. Prepare the journal entry...

On january 1, 2017, A company issued 12% stated rate bonds with a face amount of...

On january 1, 2017, A company issued 12% stated rate bonds with a face amount of $200 million. The bonds mature on january 1, 2027 and market rate was 14%. Please answer the following: 1.n= 2.i= 3.Total present value of interest payment= 4.Total present value of principal= 5.Total price of bonds=

Rama Corporation issued $600,000 of 8% term bonds on January 1, 2017, due on January 1,...

Rama Corporation issued $600,000 of 8% term bonds on January 1, 2017, due on January 1, 2022, with interest payable each July 1 and January 1. Investors require an effective-interest rate of 10%. Prepare the journal entry at the date of the bond issuance (show the calculation)? Prepare a schedule of interest expense and bond amortization from 1/1/2017 to 1/1/2020? Prepare the journal entry to record the interest payment and the amortization for July 1, 2018. Prepare the journal entry...

On January 1, 2020, Swifty Company purchased 12% bonds having a maturity value of $230,000, for...

On January 1, 2020, Swifty Company purchased 12% bonds having a maturity value of $230,000, for $247,437.40. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Swifty Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category. Prepare the journal entry at the date of the bond purchase. (Enter answers to...

On January 1, 2017, Albany Company issued 8% bonds dated January 1, 2017, with a face...

On January 1, 2017, Albany Company issued 8% bonds dated January 1, 2017, with a face amount of $10 million. The bonds mature January 1, 2027 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. Required: Determine the price of the bonds at January 1, 2017. You must show all of the steps to receive full credit. Prepare the journal entry to record...

Question