On January 1, 2021, Mania Enterprises issued 10% bonds dated January 1, 2021, with a face...

On January 1, 2021, Mania Enterprises issued 10% bonds dated January 1, 2021, with a face amount of $19.4 million. The bonds mature in 2030 (10 years). For bonds of similar risk and maturity, the market yield is 8%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your intermediate calculations to the nearest whole dollar.)

Required:
1. Determine the price of the bonds at January 1, 2021.
2. Prepare the journal entry to record the bond issuance by Mania on January 1, 2021.
3. Prepare the journal entry to record interest on June 30, 2021, using the effective interest method.
4. Prepare the journal entry to record interest on December 31, 2021, using the effective interest method.

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

On January 1, 2021, Bishop Company issued 10% bonds dated January 1, 2021, with a face...

On January 1, 2021, Bishop Company issued 10% bonds dated January 1, 2021, with a face amount of $19.7 million. The bonds mature in 2030 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your intermediate calculations to...

On January 1, 2021, Cool Universe issued 10% bonds dated January 1, 2021, with a face...

On January 1, 2021, Cool Universe issued 10% bonds dated January 1, 2021, with a face amount of $20 million. The bonds mature in 2030 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. The company's fiscal year is the calendar year. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from...

On February 1, 2021, Wolf Inc. issued 10% bonds dated February 1, 2021, with a face...

On February 1, 2021, Wolf Inc. issued 10% bonds dated February 1, 2021, with a face amount of $220,000. The bonds sold for $263,544 and mature in 20 years. The effective interest rate for these bonds was 8%. Interest is paid semiannually on July 31 and January 31. Wolf's fiscal year is the calendar year. Wolf uses the effective interest method of amortization. Required: 1. Prepare the journal entry to record the bond issuance on February 1, 2021. 2. Prepare...

Appling Enterprises issued 8% bonds with a face amount of $600,000 on January 1, 2021. The...

Appling Enterprises issued 8% bonds with a face amount of $600,000 on January 1, 2021. The bonds sold for $544,795 and mature in 2040 (20 years). For bonds of similar risk and maturity the market yield was 9%. Interest is paid semiannually on June 30 and December 31. Appling determines interest expense at the effective rate. Appling elected the option to report these bonds at their fair value. The fair values of the bonds at the end of each quarter...

On March 1, 2021, Baddour, Inc., issued 12% bonds, dated January 1, with a face amount...

On March 1, 2021, Baddour, Inc., issued 12% bonds, dated January 1, with a face amount of $175 million. The bonds were priced at $153.6 million (plus accrued interest) to yield 14%. Interest is paid semiannually on June 30 and December 31. Baddour’s fiscal year ends September 30. Required: 1. to 3. What would be the amount(s) related to the bonds Baddour would report in its balance sheet, income statement and statement of cash flows for the year ended September...

On January 1, 2018, Bishop Company issued 10% bonds dated January 1, 2018, with a face...

On January 1, 2018, Bishop Company issued 10% bonds dated January 1, 2018, with a face amount of $37 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Determine the price of...

On January 1, 2018, Bishop Company issued 10% bonds dated January 1, 2018, with a face...

On January 1, 2018, Bishop Company issued 10% bonds dated January 1, 2018, with a face amount of $20 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. Required: 1. Determine the price of the bonds at January 1, 2018. 2. Prepare the journal entry to record the bond issuance by Bishop on January 1, 2018. 3. Prepare the...

On January 1, 2018, King Co. issued 10% bonds dated January 1, 2018, with a face...

On January 1, 2018, King Co. issued 10% bonds dated January 1, 2018, with a face amount of $19.2 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your intermediate calculations to...

On January 1, 2018, Bishop Company issued 10% bonds dated January 1, 2018, with a face...

On January 1, 2018, Bishop Company issued 10% bonds dated January 1, 2018, with a face amount of $19.6 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your intermediate calculations to...

On February 1, 2021, Strauss-Lombardi issued 10% bonds, dated February 1, with a face amount of...

On February 1, 2021, Strauss-Lombardi issued 10% bonds, dated February 1, with a face amount of $930,000. The bonds sold for $855,382 and mature on January 31, 2041 (20 years). The market yield for bonds of similar risk and maturity was 11%. Interest is paid semiannually on July 31 and January 31. Strauss-Lombardi’s fiscal year ends December 31. Required: 1. to 4. Prepare the journal entries to record their issuance by Strauss-Lombardi on February 1, 2021, interest on July 31,...

Subjects