Question
In: Accounting
On January 1, 2018, Loop Raceway issued 580 bonds, each with a face value of $1,000,...
On January 1, 2018, Loop Raceway issued 580 bonds, each with a face value of $1,000, a stated interest rate of 5 percent paid annually on December 31, and a maturity date of December 31, 2020. On the issue date, the market interest rate was 6 percent, so the total proceeds from the bond issue were $564,485. Loop uses the straight-line bond amortization method and adjusts for any rounding errors when recording interest in the final year.
Required:
-
1. Prepare a bond amortization schedule.
-
2-5. Prepare the journal entries to record the bond issue, the interest payments on December 31, 2018 and 2019, the interest and face value payment on December 31, 2020 and the bond retirement. Assume the bonds are retired on January 1, 2020, at a price of 98.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
On January 1, 2018, Loop Raceway issued 580 bonds, each with a face value of $1,000,...
On January 1, 2018, Loop Raceway issued 580 bonds, each with a
face value of $1,000, a stated interest rate of 5 percent paid
annually on December 31, and a maturity date of December 31, 2020.
On the issue date, the market interest rate was 6 percent, so the
total proceeds from the bond issue were $564,485. Loop uses the
straight-line bond amortization method and adjusts for any rounding
errors when recording interest in the final year. Required: 1.
Prepare...
On January 1, 2018, Loop Raceway issued 530 bonds, each with a face value of $1,000,...
On January 1, 2018,
Loop Raceway issued 530 bonds, each with a face value of $1,000, a
stated interest rate of 7 percent paid annually on December 31, and
a maturity date of December 31, 2020. On the issue date, the market
interest rate was 8 percent, so the total proceeds from the bond
issue were $516,324. Loop uses the straight-line bond amortization
method and adjusts for any rounding errors when recording interest
in the final year.
Required:
1.
Prepare...
On January 1, 2018, Loop Raceway issued 550 bonds, each with a face value of $1,000,...
On January 1, 2018, Loop Raceway issued 550 bonds, each with a
face value of $1,000, a stated interest rate of 5 percent paid
annually on December 31, and a maturity date of December 31, 2020.
On the issue date, the market interest rate was 6 percent, so the
total proceeds from the bond issue were $535,288. Loop uses the
straight-line bond amortization method and adjusts for any rounding
errors when recording interest in the final year. Required:
1. Prepare...
On January 1, 2018, Loop Raceway issued 520 bonds, each with a face value of $1,000,...
On January 1, 2018, Loop Raceway issued 520 bonds, each with a
face value of $1,000, a stated interest rate of 5 percent paid
annually on December 31, and a maturity date of December 31, 2020.
On the issue date, the market interest rate was 6 percent, so the
total proceeds from the bond issue were $506,090. Loop uses the
straight-line bond amortization method and adjusts for any rounding
errors when recording interest in the final year.
Required:
1. Prepare...
On January 1, 2015, Loop Raceway issued 600 bonds, each with a face value of $1,000,...
On January 1, 2015, Loop Raceway issued 600 bonds, each with a
face value of $1,000, a stated
interest rate of 5% paid annually on December 31, and a maturity
date of December 31, 2017. On
the issue date, the market interest rate was 6 percent, so the
total proceeds from the bond issue
were $583,950. Loop uses the straight-line bond amortization
method and adjusts for any rounding
errors when recording interest in the final year.
Required: Show T-accounts records...
On January 1, 2018, Surreal Manufacturing issued 670 bonds, each with a face value of $1,000,...
On January 1, 2018, Surreal Manufacturing issued 670 bonds, each
with a face value of $1,000, a stated interest rate of 3 percent
paid annually on December 31, and a maturity date of December 31,
2020. On the issue date, the market interest rate was 4 percent, so
the total proceeds from the bond issue were $651,410. Surreal uses
the effective-interest bond amortization method and adjusts for any
rounding errors when recording interest in the final year.
Required:
1. Prepare...
On January 1, 2018, Surreal Manufacturing issued 530 bonds, each with a face value of $1,000,...
On January 1, 2018, Surreal Manufacturing issued 530 bonds, each
with a face value of $1,000, a stated interest rate of 3 percent
paid annually on December 31, and a maturity date of December 31,
2020. On the issue date, the market interest rate was 4 percent, so
the total proceeds from the bond issue were $515,294. Surreal uses
the simplified effective-interest bond amortization method and
adjusts for any rounding errors when recording interest in the
final year.
Required:
1....
On January 1, 2018, Surreal Manufacturing issued 600 bonds, each with a face value of $1,000,...
On January 1, 2018, Surreal Manufacturing issued 600 bonds, each
with a face value of $1,000, a stated interest rate of 3 percent
paid annually on December 31, and a maturity date of December 31,
2020. On the issue date, the market interest rate was 4 percent, so
the total proceeds from the bond issue were $583,352. Surreal uses
the simplified effective-interest bond amortization method and
adjusts for any rounding errors when recording interest in the
final year.
Required:
1....
On January 1, 2018, Surreal Manufacturing issued 610 bonds, each with a face value of $1,000,...
On January 1, 2018, Surreal Manufacturing issued 610 bonds, each
with a face value of $1,000, a stated interest rate of 3 percent
paid annually on December 31, and a maturity date of December 31,
2020. On the issue date, the market interest rate was 4 percent, so
the total proceeds from the bond issue were $593,074. Surreal uses
the effective-interest bond amortization method and adjusts for any
rounding errors when recording interest in the final year.
Required: 1. Prepare...
On January 1, 2024, Fabrikam Labs issued 1,000 bonds, each with a face value of $1,000,...
On January 1, 2024, Fabrikam Labs issued 1,000 bonds, each with
a face value of $1,000, for 102.7323. The stated interest is 3.8%,
and the market rate at the time the bonds were issued was 3.2%. The
bonds are due on January 1, 2029 (5 year term) with interest
payments due annually every January 1st. The company received cash
from the sale of the bonds. Using the effective-interest method
calculate and record the December 31, 2025 journal entry for the...
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