Question
In: Accounting
Amortize Discount by Interest Method On the first day of its fiscal year, Ebert Company issued...
Amortize Discount by Interest Method
On the first day of its fiscal year, Ebert Company issued $50,000,000 of 10-year, 7% bonds to finance its operations. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 9%, resulting in Ebert Company receiving cash of $43,495,895. The company uses the interest method.
b. Compute the amount of the bond interest expense for the first year. Round amounts to the nearest dollar.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Amortize Discount by Interest Method On the first day of its fiscal year, Ebert Company issued...
Amortize Discount by Interest Method
On the first day of its fiscal year, Ebert Company issued
$18,000,000 of 5-year, 10% bonds to finance its operations.
Interest is payable semiannually. The bonds were issued at a market
(effective) interest rate of 12%, resulting in Ebert Company
receiving cash of $16,675,281. The company uses the interest
method.
a. Journalize the entries to record the following:
1. Sale of the bonds. Round amounts to the nearest dollar. For a
compound transaction, if an...
On the first day of its fiscal year, Chin Company issued $16,800,000 of five-year, 4% bonds...
On the first day of its fiscal year, Chin Company issued
$16,800,000 of five-year, 4% bonds to finance its operations of
producing and selling home improvement products. Interest is
payable semiannually. The bonds were issued at a market (effective)
interest rate of 6%, resulting in Chin Company receiving cash of
$15,366,859.
a. Journalize the entries to record the
following:
Issuance of the bonds.
First semiannual interest payment. The bond discount
amortization, using the straight-line method, is combined with the
semiannual...
On the first day of its fiscal year, Ebert Company issued $17,000,000 of 5-year, 10% bonds...
On the first day of its fiscal year, Ebert Company issued
$17,000,000 of 5-year, 10% bonds to finance its operations.
Interest is payable semiannually. The bonds were issued at a market
(effective) interest rate of 11%, resulting in Ebert Company
receiving cash of $16,359,296. The company uses the interest
method.
a. Journalize the entries to record the following:
1. Sale of the bonds. Round amounts to the nearest dollar. For a
compound transaction, if an amount box does not require...
On January 1, the first day of its fiscal year, Pretender Company issued $18,500,000 of five-year,...
On January 1, the first day of its fiscal year, Pretender
Company issued $18,500,000 of five-year, 10% bonds to finance its
operations of producing and selling home improvement products.
Interest is payable semiannually. The bonds were issued at a market
(effective) interest rate of 12%, resulting in Pretender Company
receiving cash of $17,138,298.
Required:
A.
Journalize the entries to
record the following (refer to the Chart of Accounts for exact
wording of account titles):
1.
Issuance of the
bonds.
2....
On January 1, the first day of its fiscal year, Pretender Company issued $18,400,000 of five-year,...
On January 1, the first day of its fiscal year, Pretender
Company issued $18,400,000 of five-year, 12% bonds to finance its
operations of producing and selling home improvement products.
Interest is payable semiannually. The bonds were issued at a market
(effective) interest rate of 14%, resulting in Pretender Company
receiving cash of $17,107,672.
Required:
A.
Journalize the entries to
record the following (refer to the Chart of Accounts for exact
wording of account titles):
1.
Issuance of the
bonds.
2....
On January 1, the first day of its fiscal year, Chin Company issued $10,000,000 of five-year,...
On January 1, the first day of its fiscal year, Chin Company
issued $10,000,000 of five-year, 7% bonds to finance its operations
of producing and selling home improvement products. Interest is
payable semiannually. The bonds were issued at a market (effective)
interest rate of 8%, resulting in Chin Company receiving cash of
$9,594,415.
Required:
A.
Journalize the entries to
record the following (refer to the Chart of Accounts for exact
wording of account titles):
1.
Issuance of the
bonds.
2....
Discount Amortization On the first day of the fiscal year, a company issues a $1,400,000, 8%,...
Discount Amortization
On the first day of the fiscal year, a company issues a
$1,400,000, 8%, 4-year bond that pays semiannual interest of
$56,000 ($1,400,000 × 8% × ½), receiving cash of $1,266,974.
Journalize the first interest payment and the amortization of
the related bond discount. Round to the nearest dollar. If an
amount box does not require an entry, leave it blank.
Discount Amortization On the first day of the fiscal year, a company issues a $3,000,000, 11%,...
Discount Amortization
On the first day of the fiscal year, a company issues a
$3,000,000, 11%, five-year bond that pays semiannual interest of
$165,000 ($3,000,000 × 11% × ½), receiving cash of $2,889,599.
Journalize the first interest payment and the amortization of
the related bond discount. Round to the nearest dollar. If an
amount box does not require an entry, leave it blank.
Interest Expense
Discount on Bonds
Payable
Cash
On January 1, the first day of the fiscal year pretenders company issued $24,200 of five...
On
January 1, the first day of the fiscal year pretenders company
issued $24,200 of five years, 11% bonds to finance its operations
of producing and selling home improvement products. Interest is
payable semiannually. The bonds were issued at a market (
effective) interest rate of 13% resulting in pretender company
receiving cash of $22,460,399
A. Journalize the entries to record the following
1. Issuance of the bond
2. First semiannual interest payment. The bond discount is
combined with the...
Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its...
Entries for Issuing Bonds and Amortizing Discount by
Straight-Line Method
On the first day of its fiscal year, Chin Company issued
$22,000,000 of five-year, 8% bonds to finance its operations of
producing and selling home improvement products. Interest is
payable semiannually. The bonds were issued at a market (effective)
interest rate of 10%, resulting in Chin receiving cash of
$20,301,142.
a. Journalize the entries to record the following:
Issuance of the bonds.
First semiannual interest payment. The bond discount is...
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