Question

In: Accounting

Sheridan Company issued $1020000 of 8%, 5-year bonds at 109, which pay interest annually. Assuming straight-line...

Sheridan Company issued $1020000 of 8%, 5-year bonds at 109, which pay interest annually. Assuming straight-line amortization, what is the carrying value of the bonds after one year?

Solutions

Expert Solution


Related Solutions

Robinson Corp. issued 10%, 8-year, $2,500,000 PV bonds that pay interest annually. The bonds are date...
Robinson Corp. issued 10%, 8-year, $2,500,000 PV bonds that pay interest annually. The bonds are date 1/1/2017 and are issued on that date. The discount rate of interest for such bonds on 1/1/2017 is 8%. What cash proceeds did Robinson Corp receive from issuance of the bonds? (PV of 1 is 0.54027)                                                         (FV of 1 is 1.85093) (PV annuity due of 1 is 6.20637)                                    (PV ordinary annuity of 1 is 5.74664) a. $2,638,370 b. $2,251,618 c. $2,500,000 d. $2,787,332
A company issued 8%, 15-year bonds with a par value of $580,000 that pay interest semiannually....
A company issued 8%, 15-year bonds with a par value of $580,000 that pay interest semiannually. The market rate on the date of issuance was 8%. The journal entry to record each semiannual interest payment is: Multiple Choice Debit Bond Interest Expense $46,400; credit Cash $46,400. Debit Bond Interest Expense $530,000; credit Cash $530,000. Debit Bond Interest Expense $23,200; credit Cash $23,200. No entry is needed, since no interest is paid until the bond is due. Debit Bond Interest Payable...
Sheridan Company issued $440,000 of 5%, 10-year bonds on January 1, 2021, at face value. Interest...
Sheridan Company issued $440,000 of 5%, 10-year bonds on January 1, 2021, at face value. Interest is payable annually on January 1, 2022. Required: Assuming Sheridan has a September 30 year end, prepare the adjusting journal entry needed on September 30, 2021, and prepare the journal entry to record the interest payment on January 1, 2022, assuming reversing entries have not been used.
On December 31, 2015, Jenna Corp issued $1,000,000, 8%, 5-year bonds. Interest is payable semi-annually on...
On December 31, 2015, Jenna Corp issued $1,000,000, 8%, 5-year bonds. Interest is payable semi-annually on June 30 and December 31. The corporation uses the effective interest method of amortizing bond premium or discount. Required a. Using the present value tables, estimate the issue price of the bonds under the following three assumptions: i. Market Rate is 8% ii. Market Rate is 6% iii. Market Rate is 10% b. Prepare the journal entries for each of the assumptions
On January 1, 20x1, Smith Company issued $15,000,000 of 20-year, 5% bonds, with interest payable annually...
On January 1, 20x1, Smith Company issued $15,000,000 of 20-year, 5% bonds, with interest payable annually on December 31 of each year. The bonds were sold at an effective rate of 7% for $11,821,800. 22.        What is the maturity value of the bond issue? 23.        What is the coupon rate? 24.        What is the yield? 25.        This is a multi-part problem because the answers are dependent upon one another such that missing one part would likely result in missing...
If a corporation issued $10260000 in bonds which pay 5% annual interest, what is the annual...
If a corporation issued $10260000 in bonds which pay 5% annual interest, what is the annual net cash cost of this borrowing if the income tax rate is 30%? $5130000 $513000 $153900 $359100
On March 31st, 2020, Adtech Inc. issued $200,000, 9%, 10-year bonds. The bonds pay interest semi-annually,...
On March 31st, 2020, Adtech Inc. issued $200,000, 9%, 10-year bonds. The bonds pay interest semi-annually, on September 30 and March 31. The first interest payment is on September 30, 2020. The bonds are issued at a price of 114 1/4 (i.e., $228,500). The issuance price implies an effective interest rate of 7%. Bond issue costs are $10,000, which are amortized using the straight-line method. Adtech's fiscal year-end is on December 31. 1. Prepare all necessary journal entries in relation...
On March 31, 2020, Adtech Inc. issued $200,000, 9%,10-year bonds. The bonds pay interest semi-annually, on...
On March 31, 2020, Adtech Inc. issued $200,000, 9%,10-year bonds. The bonds pay interest semi-annually, on September 30 and March 31. The first interest payment is on September 30, 2020. The bonds are issued at a price of 1141/4 (i.e., $228,500). The issuance price implies an effective interest rate of 7%. Bond issue costs are $10,000, which are amortized using the straight-line method. Adtech’s fiscal year-end is on December 31. 1.Prepare all necessary journal entries in relation to these bonds...
On January 1, X0 the jones company issued $100000 convertible bonds. The bonds pay 5% interest...
On January 1, X0 the jones company issued $100000 convertible bonds. The bonds pay 5% interest annually and are due in 10 years. each $1000 bond can be converted into 10 shares of the company’s $75 par value common stock. The bonds were issued at 106. The company uses the straight-line method of amortization. 1. prepare the journal entry to record issuing the bond. 2. prepare the journal entry to record the annual interest payment and amortization. 3. after making...
The 19​-year, ​$1000 par value bonds of Waco Industries pay 8 percent interest annually. The market...
The 19​-year, ​$1000 par value bonds of Waco Industries pay 8 percent interest annually. The market price of the bond is ​$1105​, and the​ market's required yield to maturity on a​ comparable-risk bond is 5 percent. a.Compute the​ bond's yield to maturity. b.Determine the value of the bond to you given the​ market's required yield to maturity on a​ comparable-risk bond. c.Should you purchase the​ bond? a.What is your yield to maturity on the Waco bonds given the current market...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT