Question
In: Accounting
On October 1, 2016, Ball Company issued 10% bonds dated October 1, 2016, with a face...
On October 1, 2016, Ball Company issued 10% bonds dated October 1, 2016, with a face amount of $350,000. The bonds mature in 8 years. Interest is paid semiannually on March 31 and September 30. The proceeds from the bond issuance were $355,751.07 to yield 9.70%. Ball Company has a December 31 fiscal year-end and does not use reversing entries.
Required:
| 1. | Prepare journal entries to record the issuance of the bonds and the interest payments for 2016 and 2017 using the effective interest method. |
| 2. | Prepare journal entries to record the issuance of the bonds and the interest payments for 2016 and 2017 using the straight-line method. |
Solutions
ekkarill92 answered 1 year agoRelated Solutions
On October 1, 2016, Ball Company issued 10% bonds dated October 1, 2016, with a face...
On October 1, 2016, Ball Company issued 10% bonds dated October
1, 2016, with a face amount of $350,000. The bonds mature in 8
years. Interest is paid semiannually on March 31 and September 30.
The proceeds from the bond issuance were $355,751.07 to yield
9.70%. Ball Company has a December 31 fiscal year-end and does not
use reversing entries.
Required:
1.
Prepare journal entries to record the issuance of the bonds and
the interest payments for 2016 and 2017...
On October 1, 2016, Ball Company issued 7% bonds dated October 1, 2016, with a face...
On October 1, 2016, Ball Company issued 7% bonds dated October
1, 2016, with a face amount of $310,000. The bonds mature in 12
years. Interest is paid semiannually on March 31 and September 30.
The proceeds from the bond issuance were $320,168.62 to yield
6.60%. Ball Company has a December 31 fiscal year-end and does not
use reversing entries.
Required:
1.
Prepare journal entries to record the issuance of the bonds and
the interest payments for 2016 and 2017...
On October 1, 2016, Ball Company issued 6% bonds dated October 1, 2016, with a face...
On October 1, 2016, Ball Company issued 6% bonds dated October
1, 2016, with a face amount of $210,000. The bonds mature in 9
years. Interest is paid semiannually on March 31 and September 30.
The proceeds from the bond issuance were $218,888.62 to yield
5.40%. Ball Company has a December 31 fiscal year-end and does not
use reversing entries.
Required:
1.
Prepare journal entries to
record the issuance of the bonds and the interest payments for 2016
and 2017...
On October 1, 2016, Indigo Corp. issued $960,000, 5%, 10-year bonds at face value. The bonds...
On October 1, 2016, Indigo Corp. issued $960,000, 5%, 10-year
bonds at face value. The bonds were dated October 1, 2016, and pay
interest annually on October 1. Financial statements are prepared
annually on December 31.
Prepare the journal entry to record the issuance of the
bonds.
Prepare the adjusting entry to record the accrual of interest on
December 31, 2016.
Show the balance sheet presentation of bonds payable and bond
interest payable on December 31, 2016.
Prepare the journal...
The Bradford Company issued 12% bonds dated January 1, 2016, with a face amount of $20,000,000...
The Bradford Company issued 12% bonds dated January 1, 2016,
with a face amount of $20,000,000 on January 1, 2016. The bonds
mature on December 31, 2025 (10 years). For bonds of similar risk
and maturity the market yield is 10%. Interest is paid semiannually
on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of
$1)
Required:
A. Determine the price of the bonds at January 1, 2016.
B. Prepare the journal entry...
On February 1, 2016, Baker Company issued 9% bonds, dated February 1, with a face amount...
On February 1, 2016, Baker Company issued 9% bonds, dated
February 1, with a face amount of $ 80 million. The bonds mature on
January 31, 2020 ( 4 years). The market yield for bonds of similar
risk and maturity was 10%. Interest is paid semiannually on July 31
and January 31. The Fiscal years of both firms end December 31
Crimley Motor Products
Bond Issue: $80,000,000
Bond Issue years: 4 years
Bond Issue interest rate: 9%
Market Annual Yield:...
On October 1, 2016 Macklin Corporation issued 10-year bonds with a face value of $40,000,000. Interest...
On October 1, 2016 Macklin Corporation issued 10-year bonds with
a face value of $40,000,000. Interest is paid annually on December
31. The company uses the effective interest method. Coupon
rate is 2% and market rate is 4%
a) Find the issue price.
b) The entry to record the issuance of the bonds.
c) Prepare the journal entry to record the first interest
payment on December 31.
The Bradford Company issued 10% bonds, dated January 1, with a face amount of $80 million...
The Bradford Company issued 10% bonds, dated January 1, with a
face amount of $80 million on January 1, 2021 to Saxton-Bose
Corporation. The bonds mature on December 31, 2030 (10 years). For
bonds of similar risk and maturity, the market yield is 12%.
Interest is paid semiannually on June 30 and December 31. (FV of
$1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of
$1)
Required:
1. to 3. Prepare the journal...
The Bradford Company issued 10% bonds, dated January 1, with a face amount of $80 million...
The Bradford Company issued 10% bonds, dated January 1, with a
face amount of $80 million on January 1, 2021 to Saxton-Bose
Corporation. The bonds mature on December 31, 2030 (10 years). For
bonds of similar risk and maturity, the market yield is 12%.
Interest is paid semiannually on June 30 and December 31. (FV of
$1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of
$1)
Required:
1. to 3. Prepare the journal...
The Bradford Company issued 10% bonds, dated January 1, with a face amount of $50 million...
The Bradford Company issued 10% bonds, dated January 1, with a
face amount of $50 million on January 1, 2018 to Saxton-Bose
Corporation. The bonds mature on December 31, 2027 (10 years). For
bonds of similar risk and maturity, the market yield is 12%.
Interest is paid semiannually on June 30 and December 31. (FV of
$1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use
appropriate factor(s) from the tables provided.):...
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