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On January 1, 2016, Knorr Corporation issued $1,100,000 of 9%, 5-year bonds dated January 1, 2016....
On January 1, 2016, Knorr Corporation issued $1,100,000 of 9%, 5-year bonds dated January 1, 2016. The bonds pay interest annually on December 31. The bonds were issued to yield 10%. Bond issue costs associated with the bonds totaled $20,058.17. Do not round answers.
Required: Prepare the journal entries to record the following: January 1, 2016 Sold the bonds at an effective rate of 10% December 31, 2016 First interest payment using the effective interest method December 31, 2016 Amortization of bond issue costs using the straight-line method December 31, 2017 Second interest payment using the effective interest method December 31, 2017 Amortization of bond issue costs using the straight-line method
Solutions
Expert Solution
Above figures have been calculated in the following manner:
ekkarill92 answered 2 years agoRelated Solutions
On January 1, 2016, Knorr Corporation issued $1,100,000 of 9%, 5-year bonds dated January 1, 2016....
On January 1, 2016, Knorr Corporation issued $1,100,000 of 9%,
5-year bonds dated January 1, 2016. The bonds pay interest annually
on December 31. The bonds were issued to yield 10%. Bond issue
costs associated with the bonds totaled $20,058.17.
Required: Prepare the journal entries to record the
following:
January 1, 2016 Sold the bonds at an effective rate of 10%
December 31, 2016 First interest payment using the effective
interest method
December 31, 2016 Amortization of bond issue costs...
On january 1, 2016, Knorr Corporation issued $1,000,000 or 9%, 5-year bonds dated January 1, 2016....
On january 1, 2016, Knorr Corporation issued
$1,000,000 or 9%, 5-year bonds dated January 1, 2016. The bonds pay
interest on December 31. The bonds were issued to yield 10%. Bond
issue costs associated with the bonds totaled $18,000.
Prepare the journal entries to record the
following:
January 1, 2016: Sold the bonds at an effective
rate of 10%
December 21, 2016: First interest payment using the effective
interest method
December 31, 2016: Amortization of bond issue costs using the...
On January 1, 2016, Knorr Corporation issued $1,400,000 of 6%, 5-year bonds dated January 1, 2016....
On January 1, 2016, Knorr Corporation issued $1,400,000 of 6%,
5-year bonds dated January 1, 2016. The bonds pay interest annually
on December 31. The bonds were issued to yield 7%. Bond issue costs
associated with the bonds totaled $27,560.53.
Required: Prepare the journal entries to record the
following:
January 1, 2016 Sold the bonds at an effective rate of 7%
December 31, 2016 First interest payment using the effective
interest method
December 31, 2016 Amortization of bond issue costs...
On January 1, 2016, Knorr Corporation issued $800,000 of 6%, 5-year bonds dated January 1, 2016....
On January 1, 2016, Knorr Corporation issued $800,000 of 6%,
5-year bonds dated January 1, 2016. The bonds pay interest annually
on December 31. The bonds were issued to yield 7%. Bond issue costs
associated with the bonds totaled $18,848.31.
Required:
Prepare the journal entries to record the
following:
January 1, 2016, Sold the bonds at an effective rate of 7%
December 31, 2016, First interest payment using the effective
interest method
December 31, 2016, Amortization of bond issue costs...
On January 1, 2016, Knorr Corporation issued $800,000 of 6%, 5-year bonds dated January 1, 2016....
On January 1, 2016, Knorr Corporation issued $800,000 of 6%,
5-year bonds dated January 1, 2016. The bonds pay interest annually
on December 31. The bonds were issued to yield 7%. Bond issue costs
associated with the bonds totaled $18,848.31. Required: Prepare the
journal entries to record the following: January 1, 2016 Sold the
bonds at an effective rate of 7% December 31, 2016 First interest
payment using the effective interest method December 31, 2016
Amortization of bond issue costs...
Chowan Corporation issued $115,000 of 9% bonds dated January 1, 2016, for $111,283.65 on January 1,...
Chowan Corporation issued $115,000 of 9% bonds dated January 1,
2016, for $111,283.65 on January 1, 2016. The bonds are due
December 31, 2019, were issued to yield 10%, and pay interest
semiannually on June 30 and December 31. Chowan uses the effective
interest method of amortization.
Required:
Prepare the journal entries to
record the issue of the bonds on January 1, 2016, and the interest
payments on June 30, 2016, December 31, 2016, and June 30, 2017. In
addition,...
Grouper Corporation sold $2,400,000, 9%, 5-year bonds on January 1, 2022. The bonds were dated January...
Grouper Corporation sold $2,400,000, 9%, 5-year bonds on January
1, 2022. The bonds were dated January 1, 2022, and pay interest on
January 1. Grouper Corporation uses the straight-line method to
amortize bond premium or discount. (a) Prepare all the necessary
journal entries to record the issuance of the bonds and bond
interest expense for 2022, assuming that the bonds sold at 103.
(Credit account titles are automatically indented when amount is
entered. Do not indent manually.) Date Account Titles...
On January 1, 2020, Caliber Corporation issued 9% bonds dated January 1, 2020, with a face...
On January 1, 2020, Caliber Corporation issued 9% bonds dated
January 1, 2020, with a face amount of $10 million. The bonds
mature in 2029 (10 years). For bonds of similar risk and maturity,
the market yield is 10%. Interest is paid annually on December
31.
1. What is the amount of the annual interest payment?
2. What is the price of the bond on the issue date? (state
method used)
3. Was the bond sold at a discount or...
On January 1, 2018, Pharoah Corporation issued $2,400,000 of 5-year, 9% bonds at 96. The bonds...
On January 1, 2018, Pharoah Corporation issued $2,400,000 of
5-year, 9% bonds at 96. The bonds pay interest annually on January
1. By January 1, 2020, the market rate of interest for bonds of
risk similar to those of Pharoah Corporation had risen. As a
result, the market value of these bonds was $2,130,000 on January
1, 2020—below their carrying value. Joanna Pharoah, president of
the company, suggests repurchasing all of these bonds in the open
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Question 3 On January 1, 2020, Gus Corporation issued $4,000,000, 6%, 5-year bonds dated January 1,...
Question 3
On January 1, 2020, Gus Corporation issued $4,000,000, 6%,
5-year bonds dated January 1, 2020, at 98. The bonds pay
semi-annual interest on January 1 and July 1. The company uses the
straight-line method of amortization and has a calendar year
end.
Required
Prepare all the journal entries that Gus Corporation would
make related to this bond issue through January 1, 2021. Be sure to
indicate the date on which the entries would be made.
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