Question
In: Accounting
Queen Energy Inc. issued bonds on January 1, 2020, that pay interest semiannually on June 30...
Queen Energy Inc. issued bonds on January 1, 2020, that pay
interest semiannually on June 30 and December 31. The par value of
the bonds is $140,000, the annual contract rate is 8%, and the
bonds mature in 10 years. (Use TABLE 14A.1 and TABLE 14A.2.)
(Use appropriate factor(s) from the tables
provided.)
Required:
a. For each of these three situations, determine
the issue price of the bonds. (Do not round intermediate
calculations. Round the final answers to the nearest whole
dollar.)
| Market rate Interest | Issue Price of the Bonds | |
| 1) | 6% | |
| 2) | 8% | |
| 3) | 10% |
b. For each of these three situations, prepare the
journal entry that would record the issuance, assuming the market
interest rate at the date of issuance was (1) 6%, (2) 8%, (3) 10%.
(Use PV tables in determining the issue price of the bonds.
Do not round intermediate calculations. Round the final answers to
the nearest whole dollar.)
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Queen Energy Inc. issued bonds on January 1, 2020, that pay interest semiannually on June 30...
Queen Energy Inc. issued bonds on January 1, 2020, that pay
interest semiannually on June 30 and December 31. The par value of
the bonds is $310,000, the annual contract rate is 12%, and the
bonds mature in 10 years. (Use TABLE 14A.1 and TABLE 14A.2.)
(Use appropriate factor(s) from the tables
provided.)
Required:
a. For each of these three situations, determine
the issue price of the bonds.
1. 8%
2. 12%
3. 14%
b. For each of these three...
On January 1, 2016, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June...
On January 1, 2016, Tennessee Harvester Corporation issued
debenture bonds that pay interest semiannually on June 30 and
December 31. Portions of the bond amortization schedule appear
below:
Payment
Cash
Payment
Effective
Interest
Increase in
Balance
Outstanding
Balance
6,047,387
1
292,000
302,369
10,369
6,057,756
2
292,000
302,888
10,888
6,068,644
3
292,000
303,432
11,432
6,080,076
4
292,000
304,004
12,004
6,092,080...
On January 1, 2018, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June...
On January 1, 2018, Tennessee Harvester Corporation issued
debenture bonds that pay interest semiannually on June 30 and
December 31. Portions of the bond amortization schedule appear
below:
Payment
Cash
Payment
Effective
Interest
Increase
in
Balance
Outstanding
Balance
6,256,164
1
234,000
250,247
16,247
6,272,411
2
234,000
250,896
16,896
6,289,307
3
234,000
251,572
17,572
6,306,879
4
234,000
252,275
18,275
6,325,154
5
234,000
253,006
19,006
6,344,160
6
234,000
253,766
19,766
6,363,926
~
~
~
~
~
~
~
~
~
~
~...
On January 1, 2021, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June...
On January 1, 2021, Tennessee Harvester Corporation issued
debenture bonds that pay interest semiannually on June 30 and
December 31. Portions of the bond amortization schedule appear
below:
Payment
Cash
Payment
Effective
Interest
Increase in
Balance
Outstanding
Balance
7,041,478
1
340,000
352,074
12,074
7,053,552
2
340,000
352,678
12,678
7,066,230
3
340,000
353,311
13,311
7,079,541
4
340,000
353,977
13,977
7,093,518
5
340,000
354,676
14,676
7,108,194
6
340,000
355,410
15,410
7,123,604
~
~
~
~
~
~
~
~
~
~
~...
On January 1, 2018, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June...
On January 1, 2018, Tennessee Harvester Corporation issued
debenture bonds that pay interest semiannually on June 30 and
December 31. Portions of the bond amortization schedule appear
below:
Payment Cash Payment Effective Interest Increase in Balance
Outstanding Balance
6,286,574
1 370,000 377,194 7,194 6,293,768
2 370,000 377,626 7,626 6,301,394
3 370,000 378,084 8,084 6,309,478
4 370,000 378,569 8,569 6,318,047
5 370,000 379,083 9,083 6,327,130
6 370,000 379,628 9,628 6,336,758
~ ~ ~ ~ ~
~ ~ ~ ~ ~
~...
On January 1, 2018, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June...
On January 1, 2018, Tennessee Harvester Corporation issued
debenture bonds that pay interest semiannually on June 30 and
December 31. Portions of the bond amortization schedule appear
below:
Payment
Cash
Payment
Effective
Interest
Increase
in
Balance
Outstanding
Balance
5,774,920
1
216,000
230,997
14,997
5,789,917
2
216,000
231,597
15,597
5,805,514
3
216,000
232,221
16,221
5,821,735
4
216,000
232,869
16,869
5,838,604
5
216,000
233,544
17,544
5,856,148
6
216,000
234,246
18,246
5,874,394
~
~
~
~
~
~
~
~
~
~
~...
On January 1, 2018, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June...
On January 1, 2018, Tennessee Harvester Corporation issued
debenture bonds that pay interest semiannually on June 30 and
December 31. Portions of the bond amortization schedule appear
below:
Payment
Cash
Payment
Effective
Interest
Increase in Balance
Outstanding
Balance
6,627,273
1
320,000
331,364
11,364
6,638,637
2
320,000
331,932
11,932
6,650,569
3
320,000
332,528
12,528
6,663,097
4
320,000
333,155
13,155
6,676,252
5
320,000
333,813
13,813
6,690,065
6
320,000
334,503
14,503
6,704,568
~
~
~
~
~
~
~
~
~...
Flagstaff Systems issues bonds dated January 1, 2017, that pay interest semiannually on June 30 and...
Flagstaff Systems issues bonds dated January 1, 2017, that pay
interest semiannually on June 30 and December 31. The bonds have a
$90,000 par value and an annual contract rate of 12%, and they
mature in five years.
Required
For each of the following three separate situations, (a) determine
the bonds’ issue price on January 1,
2017, and (b) prepare the journal entry to record their
issuance.
1. The market rate at the date of issuance is 10%.
2. The...
Hartford Research issues bonds dated January 1, 2017, that pay interest semiannually on June 30 and...
Hartford Research issues bonds dated January 1, 2017, that pay
interest semiannually on June 30 and December
31. The bonds have a $40,000 par value and an annual contract rate
of 10%, and they mature in 10 years.
Required
For each of the following three separate situations, (a) determine
the bonds’ issue price on January 1,
2017, and (b) prepare the journal entry to record their
issuance.
1. The market rate at the date of issuance is 8%.
2. The...
Harford Research issues bonds dated january 1, 2017 that pay interest semiannually on june 30 and...
Harford Research issues bonds dated january 1, 2017 that pay
interest semiannually on june 30 and december 31. The bonds have a
$40000 par value and an annual contract rae of 10% and they mature
in 10 years. For each of the following three separate situations
(a) determine the bonds issue price on january 1, 2017 and (b)
prepare the jurnal entry to record their issuance. 1. The market
rate at the date of issuance is 8%. 2. The market...
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