Question

In: Accounting

Marigold Corp. issues $30600000 of 10-year, 7% bonds on March 1, 2020 at 97 plus accrued...

Marigold Corp. issues $30600000 of 10-year, 7% bonds on March 1, 2020 at 97 plus accrued interest. The bonds are dated January 1, 2020, and pay interest on June 30 and December 31. What is the total cash received on the issue date?

Solutions

Expert Solution

Face value of each bond                               = $100.00

Face value of of total 7% bond    = $30,600,000.00

Number of bonds issued = $30,600,000.00 / $100.00

= 306,000 bonds

Accrued Interest on March 1, 2020 = $30,600,000.00 * 7% *(2months / 12 months)

                                                            = $30,600,000.00 *7% * 2/12

                                                            = $357,000.00

Cash collected on the date of issue:

= 306,000 bonds * $97.00 + Accrued Interest

= $29,682,000 + $357,000

= $30,039,000.00

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Farmer Company issues $25,000,000 of 10-year, 9% bonds on March 31, 2014 at 97 plus accrued...
Farmer Company issues $25,000,000 of 10-year, 9% bonds on March 31, 2014 at 97 plus accrued interest. The bonds are dated January 1, 2014, and pay interest on June 30 and December 31. What is the total cash received on the issue date?
Bramble Corp. issues 4200, 10-year, 8%, $1000 bonds dated January 1, 2017, at 97. The journal...
Bramble Corp. issues 4200, 10-year, 8%, $1000 bonds dated January 1, 2017, at 97. The journal entry to record the issuance will show a A) credit to Cash for $4074000. B) debit to Cash of $4200000. C) credit to Bonds Payable for $4074000. D)debit to Discount on Bonds Payable for $126000.
Assume that on April 1, 2016?, Pacific?, Corp., issues 7 percent, 10-year bonds payable with a...
Assume that on April 1, 2016?, Pacific?, Corp., issues 7 percent, 10-year bonds payable with a maturity value of $100,000. The bonds pay interest on March31 and September 30?, and Pacific amortizes any premium or discount by the? straight-line method. Pacific?'s fiscal? year-end is December 31. 1. If the market interest rate is 6 percent when Pacific?, Corp., issues its? bonds, will the bonds be priced at? par, at a? premium, or at a? discount? Explain. 2. If the market...
Blue Inc. issued $3,840,000 of 10%, 10-year convertible bonds on June 1, 2020, at 98 plus...
Blue Inc. issued $3,840,000 of 10%, 10-year convertible bonds on June 1, 2020, at 98 plus accrued interest. The bonds were dated April 1, 2020, with interest payable April 1 and October 1. Bond discount is amortized semiannually on a straight-line basis. On April 1, 2021, $1,440,000 of these bonds were converted into 24,000 shares of $21 par value common stock. Accrued interest was paid in cash at the time of conversion. (a) Prepare the entry to record the interest...
Shamrock Inc. issued $4,260,000 of 10%, 10-year convertible bonds on June 1, 2020, at 98 plus...
Shamrock Inc. issued $4,260,000 of 10%, 10-year convertible bonds on June 1, 2020, at 98 plus accrued interest. The bonds were dated April 1, 2020, with interest payable April 1 and October 1. Bond discount is amortized semiannually on a straight-line basis. On April 1, 2021, $1,597,500 of these bonds were converted into 33,000 shares of $20 par value common stock. Accrued interest was paid in cash at the time of conversion. (a) Prepare the entry to record the interest...
Windsor Inc. issued $3,840,000 of 10%, 10-year convertible bonds on June 1, 2020, at 99 plus...
Windsor Inc. issued $3,840,000 of 10%, 10-year convertible bonds on June 1, 2020, at 99 plus accrued interest. The bonds were dated April 1, 2020, with interest payable April 1 and October 1. Bond discount is amortized semiannually on a straight-line basis. On April 1, 2021, $1,440,000 of these bonds were converted into 35,000 shares of $21 par value common stock. Accrued interest was paid in cash at the time of conversion. (a) Prepare the entry to record the interest...
Blue Inc. issued $3,840,000 of 10%, 10-year convertible bonds on June 1, 2020, at 98 plus...
Blue Inc. issued $3,840,000 of 10%, 10-year convertible bonds on June 1, 2020, at 98 plus accrued interest. The bonds were dated April 1, 2020, with interest payable April 1 and October 1. Bond discount is amortized semiannually on a straight-line basis. On April 1, 2021, $1,440,000 of these bonds were converted into 24,000 shares of $21 par value common stock. Accrued interest was paid in cash at the time of conversion. (a) Prepare the entry to record the interest...
Crane Company issues $5040000, 7%, 5-year bonds dated January 1, 2020 on January 1, 2020. The...
Crane Company issues $5040000, 7%, 5-year bonds dated January 1, 2020 on January 1, 2020. The bonds pay interest semiannually on June 30 and December 31. The bonds are issued to yield 6%. What are the proceeds from the bond issue? ff 3.0% 3.5% 6% 7% Present value of a single sum for 5 periods 0.86261 0.84197 0.74726 0.71299 Present value of a single sum for 10 periods 0.74409 0.70892 0.55839 0.50835 Present value of an annuity for 5 periods...
Company Corp. issues $1,000,000, 9%, semiannual bonds on 1/1/Year 1. The bonds mature in 10 years...
Company Corp. issues $1,000,000, 9%, semiannual bonds on 1/1/Year 1. The bonds mature in 10 years and have an effective rate of 10%. On 1/1/Year 2, Company Corp. retires the bonds at 110 plus accrued interest. Prepare the journal entry for the issuance of the bonds Prepare the entries for Year 1 related to the bond Prepare the entry for the retirement of the bonds
On August 1, Year 1, Ant Company sold Bee Company $1,500,000 of 10 year, 6% bonds, dated July 1 at 100 plus accrued interest.
On August 1, Year 1, Ant Company sold Bee Company $1,500,000 of 10 year, 6% bonds, dated July 1 at 100 plus accrued interest. On March 1 Year 2. Bee sold har of the bonds for $782,500 plus accrued interest Required: Present entries to record the following transactions: Bee Company (a) Purchase of bonds on August 1 Year 1. (b) Receipt of first semiannual interest amount on December 31, Year 1(c) The sale of the bonds on March 1, Year 2
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT