(14) Bond issue and retirement On June 30, 2020, Desjardin Inc. issued $1,000,000 in bonds. The...

(14) Bond issue and retirement

On June 30, 2020, Desjardin Inc. issued $1,000,000 in bonds. The bonds pay interest twice a year on December 31 and June 30, mature in 10 years, and have a coupon rate of 5%. They were sold to yield 5.6%. Desjardin follows IFRS. On December 31, 2021, Desjardin repurchased 40% of the bonds. At that time the bonds were selling at 98.

Instructions (Round all values to the nearest dollar)

a) What was the issue price of the bonds?

b) Prepare all journal entries for the bonds up to and including the retirement of 40% of the bonds on December 31, 2021.

June 30, 20


Dec. 31



June 30/21



Dec. 31



31

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Exercise 14-09 On June 30, 2020, Indigo Company issued $4,380,000 face value of 14%, 20-year bonds...

Exercise 14-09 On June 30, 2020, Indigo Company issued $4,380,000 face value of 14%, 20-year bonds at $5,039,020, a yield of 12%. Indigo uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31. Prepare the journal entries to record the following transactions. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit...

On June 30, 2020, Crane Company issued $5,640,000 face value of 14%, 20-year bonds at $6,488,600,...

On June 30, 2020, Crane Company issued $5,640,000 face value of 14%, 20-year bonds at $6,488,600, a yield of 12%. Crane uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31. (a) Prepare the journal entries to record the following transactions. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account...

On June 30, 2020, Crane Limited issued $6 million of 20-year, 14% bonds for $6,902,766, which...

On June 30, 2020, Crane Limited issued $6 million of 20-year, 14% bonds for $6,902,766, which provides a yield of 12%. The company uses the effective interest method to amortize any bond premium or discount. The bonds pay semi-annual interest on June 30 and December 31. Prepare the journal entries to record the following transactions: (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no...

On June 30, 2020, Nash Company issued $3,340,000 face value of 14%, 20-year bonds at $3,842,540,...

On June 30, 2020, Nash Company issued $3,340,000 face value of 14%, 20-year bonds at $3,842,540, a yield of 12%. Nash uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31. (a) Prepare the journal entries to record the following transactions. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account...

On June 30, 2020, Buffalo Company issued $4,860,000 face value of 14%, 20-year bonds at $5,591,240,...

On June 30, 2020, Buffalo Company issued $4,860,000 face value of 14%, 20-year bonds at $5,591,240, a yield of 12%. Buffalo uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31. (a) Prepare the journal entries to record the following transactions. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account...

Queen Energy Inc. issued bonds on January 1, 2020, that pay interest semiannually on June 30...

Queen Energy Inc. issued bonds on January 1, 2020, that pay interest semiannually on June 30 and December 31. The par value of the bonds is $140,000, the annual contract rate is 8%, and the bonds mature in 10 years. (Use TABLE 14A.1 and TABLE 14A.2.) (Use appropriate factor(s) from the tables provided.) Required: a. For each of these three situations, determine the issue price of the bonds. (Do not round intermediate calculations. Round the final answers to the nearest...

Queen Energy Inc. issued bonds on January 1, 2020, that pay interest semiannually on June 30...

Queen Energy Inc. issued bonds on January 1, 2020, that pay interest semiannually on June 30 and December 31. The par value of the bonds is $310,000, the annual contract rate is 12%, and the bonds mature in 10 years. (Use TABLE 14A.1 and TABLE 14A.2.) (Use appropriate factor(s) from the tables provided.) Required: a. For each of these three situations, determine the issue price of the bonds. 1. 8% 2. 12% 3. 14% b. For each of these three...

On June 30, 2009, Einstein Corp. issued 10% bonds with a par value of $1,000,000 due...

On June 30, 2009, Einstein Corp. issued 10% bonds with a par value of $1,000,000 due in 20 years. They were issued at 98 and were callable at 102 at any date after June 30, 2017. Because of lower interest rates and a significant change in the company’s credit rating, it was decided to call the entire issue on June 30, 2018, and to issue new bonds. New 6% bonds were sold in the amount of $1,100,000 at 101; they...

1. Grant Inc. issued $400,000 of 6% bonds on June 30, 2016. The bonds mature in...

1. Grant Inc. issued $400,000 of 6% bonds on June 30, 2016. The bonds mature in 10 years. For bonds of similar risk and maturity, the market interest rate is 4%. Interest is paid semiannually on December 31 and June 30. (i.e., the first interest payment will be made on December 31, 2016). For all computations, ignore below decimal point. a) Determine whether the company sold the bond at discount or premium b) Determine the price of the bonds at...

On September 30, Jose’s Jalapenos Inc., issued $1,000,000 of 10-year 9% bonds sated September 30, for...

On September 30, Jose’s Jalapenos Inc., issued $1,000,000 of 10-year 9% bonds sated September 30, for $1,067,950 an effective (market) rate of 8%. Interest is payable semi-annually on October 1 and April 1. The bonds were purchased by Juan’s Junk and Basura Inc. Present the entries to record the following transactions for the current year on BOTH sets of books: (Issuing Corporation and Investor) a) Issuance of bonds b) Accrual of interest and amortization for the period ended December 31....

Subjects