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.

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

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...

On January 1, 2020, Perfection Company issued $400,000 of 10%, 6-year bonds dated January 1, 2020,...

On January 1, 2020, Perfection Company issued $400,000 of 10%, 6-year bonds dated January 1, 2020, with interest payments every June 30 and December 31. The bonds were issued at $382,762 when the market rate was 11%. Perfection Company amortizes any premium or discount using the EFFECTIVE-INTEREST-RATE method. Round all numbers to the nearest whole number. 1-Using proper formatting (eliminating the date), prepare the journal entry on January 1, 2020 to record the issuance of the bonds. 2-Using proper formatting...

1. On January 1, 2020, Travis Corporation issued $800,000, 6%, 5-year bonds for $735,110. The bonds...

1. On January 1, 2020, Travis Corporation issued $800,000, 6%, 5-year bonds for $735,110. The bonds were sold to yield an effective-interest rate of 8%. Interest is paid semiannually on July 1 and January 1. The company uses the effective-interest method of amortization. Instructions: Prepare the journal entries that Travis Corporation would make on January 1, June 30, December 31, 2020, January 1, 2021 and at maturity, related to the bond issue

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...

Ayayai Corporation sold $2,100,000, 6%, 5-year bonds on January 1, 2022. The bonds were dated January...

Ayayai Corporation sold $2,100,000, 6%, 5-year bonds on January 1, 2022. The bonds were dated January 1, 2022, and pay interest on January 1. Ayayai Corporation uses the straight-line method to amortize bond premium or discount. 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 102. Prepare journal entries to record the issuance of the bonds and bond interest expense for 2022, assuming that...

Cheyenne Corporation sold $2,300,000, 6%, 5-year bonds on January 1, 2022. The bonds were dated January...

Cheyenne Corporation sold $2,300,000, 6%, 5-year bonds on January 1, 2022. The bonds were dated January 1, 2022, and pay interest on January 1. Cheyenne Corporation uses the straight-line method to amortize bond premium or discount. 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 106. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and...

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 $1,100,000 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...

Subjects