Question
In: Accounting
Lemon Co. sells $1,000,000 of 10% bonds on August 1, 2017. The bonds pay interest on...
Lemon Co. sells $1,000,000 of 10% bonds on August 1, 2017. The bonds pay interest on February 1 and August 1. The due date of the bonds is August 1, 2020. The bonds yield 12%. On October 1, 2018, Lemon Co. buys back $200,000 worth of bonds for $218,000 (includes accrued interest). Give entries through October 1, 2018
| What is the present value of the bond at the date of issuance? | |||||
| What is the amount of interest expense as of 12/31/17? | |||||
| What is the amount of interest expense as of 2/1/18? | |||||
| What is the amount of interest expense as of 8/1/18? | |||||
| What is the amount of interest expense as of 10/1/18 for | |||||
| the bonds reacquired? | |||||
| What is the loss on the bonds reacquired at 10/1/18? | |||||
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Lemon Co. sells $1,000,000 of 10% bonds on August 1, 2017. The bonds pay interest on...
Lemon Co. sells $1,000,000 of 10% bonds on August 1, 2017. The
bonds pay interest on February 1 and August 1. The due date of the
bonds is August 1, 2020. The bonds yield 12%. On October 1, 2018,
Lemon Co. buys back $200,000 worth of bonds for $218,000 (includes
accrued interest). Give entries through October 1, 2018.
When doing the amortization table, please show your work in
excel! Thanks
Wildhorse Co. sells $467,000 of 10% bonds on March 1, 2017. The bonds pay interest on...
Wildhorse Co. sells $467,000 of 10% bonds on March 1, 2017. The
bonds pay interest on September 1 and March 1. The due date of the
bonds is September 1, 2020. The bonds yield 12%.
Prepare a bond amortization schedule using the effective-interest
method for discount and premium amortization. Amortize premium or
discount on interest dates and at year-end.
a. Sweet Co. sells $360,000 of 12% bonds on June 1, 2017. The bonds pay interest...
a. Sweet Co. sells $360,000 of 12%
bonds on June 1, 2017. The bonds pay interest on December 1 and
June 1. The due date of the bonds is June 1, 2021. The bonds yield
10%. On October 1, 2018, Sweet buys back $118,800 worth of bonds
for $124,800 (includes accrued interest).
Prepare a bond amortization schedule using the effective-interest
method for discount and premium amortization. Amortize premium or
discount on interest dates and at year-end. (Round
answers to 0...
Swifty Co. sells $386,000 of 12% bonds on June 1, 2017. The bonds pay interest on...
Swifty Co. sells $386,000 of 12% bonds on June 1, 2017. The
bonds pay interest on December 1 and June 1. The due date of the
bonds is June 1, 2021. The bonds yield 8%. On October 1, 2018,
Swifty buys back $123,520 worth of bonds for $129,520 (includes
accrued interest).
Prepare a bond amortization schedule using the effective-interest
method for discount and premium amortization. Amortize premium or
discount on interest dates and at year-end. (Round
answers to 0 decimal...
Oriole Co. sells $404,000 of 12% bonds on June 1, 2017. The bonds pay interest on...
Oriole Co. sells $404,000 of 12% bonds on June 1, 2017. The
bonds pay interest on December 1 and June 1. The due date of the
bonds is June 1, 2021. The bonds yield 10%. On October 1, 2018,
Oriole buys back $125,240 worth of bonds for $130,240 (includes
accrued interest).
Prepare a bond amortization schedule using the
effective-interest method for discount and premium amortization.
Amortize premium or discount on interest dates and at year-end.
(Round answers to 0 decimal...
Sheffield Co. sells $413,000 of 12% bonds on June 1, 2017. The bonds pay interest on...
Sheffield Co. sells $413,000 of 12% bonds on June 1, 2017. The
bonds pay interest on December 1 and June 1. The due date of the
bonds is June 1, 2021. The bonds yield 10%. On October 1, 2018,
Sheffield buys back $128,030 worth of bonds for $134,030 (includes
accrued interest).
Prepare a bond amortization schedule using the effective-interest
method for discount and premium amortization. Amortize premium or
discount on interest dates and at year-end
Ivanhoe Co. sells $397,000 of 12% bonds on June 1, 2017. The bonds pay interest on...
Ivanhoe Co. sells $397,000 of 12% bonds on June 1, 2017. The
bonds pay interest on December 1 and June 1. The due date of the
bonds is June 1, 2021. The bonds yield 8%. On October 1, 2018,
Ivanhoe buys back $127,040 worth of bonds for $132,040 (includes
accrued interest).
Prepare a bond amortization schedule using the effective-interest
method for discount and premium amortization. Amortize premium or
discount on interest dates and at year-end.
Sage Co. sells $ 403,000 of 12% bonds on June 1, 2017. The bonds pay interest...
Sage Co. sells $ 403,000 of 12% bonds on June 1, 2017. The bonds
pay interest on December 1 and June 1. The due date of the bonds is
June 1, 2021. The bonds yield 10%. On October 1, 2018, Sage buys
back $ 132,990 worth of bonds for $ 138,990 (includes accrued
interest).
-Prepare a bond amortization schedule using the effective-interest
method for discount and premium amortization. Amortize premium or
discount on interest dates and at year-end
-Prepare all...
Oriole Co. sells $483,000 of 10% bonds on March 1, 2020. The bonds pay interest on...
Oriole Co. sells $483,000 of 10% bonds on March 1, 2020. The
bonds pay interest on September 1 and March 1. The due date of the
bonds is September 1, 2023. The bonds yield 12%. Give entries
through December 31, 2021. Prepare a bond amortization schedule
using the effective-interest method for discount and premium
amortization. Amortize premium or discount on interest dates and at
year-end.
part b. Prepare all of the relevant journal entries from the
time of sale until...
Danny Ferry Co. sells $250,000 of 10% bonds on March 1, 2007. The bonds pay interest...
Danny Ferry Co. sells $250,000 of 10% bonds on March 1, 2007.
The bonds pay interest on September 1 and March 1. The due date of
the bond is September 1, 2010. The bond yield is 12%. Give entries
through December 31, 2008.
Round to the nearest dollar.
Instructions:
Prepare all of the relevant journal entries from the time of
sale until the date indicated. Use the effective interest method
for discount amortization. (Assume the no reversing entries are
made.)
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