On 1 January 2013, Ouyang Inc. issues $1,000,000 face value, 10-year bonds with annual interest rate...

On 1 January 2013, Ouyang Inc. issues $1,000,000 face value, 10-year bonds with annual interest rate of 5% to be paid each year on December 31. The market interest rate is 5.5%. Using the effective interest rate method of amortization, Ouyang Inc. should record when it closes its annual book on Dec 31, 2013 (Round your number to integers):

a carrying amount of 962,312 on Dec 31, 2013;

an interest expense of 53,088 on Dec 31, 2013;

a cash disbursement of 52,927 on Dec 31, 2013;

a carrying amount of 965,239 on Dec 31, 2013;

an amortization of premium.

Solutions

Expert Solution

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

On January 1 Company issues a 5 year $1,000,000 face value bond with a 5% annual...

On January 1 Company issues a 5 year $1,000,000 face value bond with a 5% annual coupon paid semiannually. The company issues it for $916,884 for an effective interest rate of 7% and uses the effective-interest amortization method. Journalize the issuance: What is the total cost of the borrowing over the life of the SSS bond? Journalize the entry on July 1 to record SSS’s payment of interest and the amortization of the bond discount (assume no accrual was made...

On January 1, a business issues $500,000 face value, 10 year, 10% contract rate bonds dated...

On January 1, a business issues $500,000 face value, 10 year, 10% contract rate bonds dated January 1. Interest is payable semiannually each June 30 and December 31. Prepare any necessary journal entries on January 1 to issue the bonds under the following independent circumstances. (Please be sure to show your work) A. The market interest rate on January 1 is 10%. B. The market interest rate on January 1 is 12%. C. The market interest rate on January 1...

On January 1, a business issues $500,000 face value, 10 year, 10% contract rate bonds dated...

On January 1, a business issues $500,000 face value, 10 year, 10% contract rate bonds dated January 1. Interest is payable semiannually each June 30 and December 31. Prepare any necessary journal entries on January 1 to issue the bonds under the following independent circumstances. (Please be sure to show your work.) The market interest rate on January 1 is 10%. The market interest rate on January 1 is 12%. The market interest rate on January 1 is 8%.

On January 1, 2020, Linen Corp. issued $ 540,000 (face value), 10% annual interest, ten-year bonds...

On January 1, 2020, Linen Corp. issued $ 540,000 (face value), 10% annual interest, ten-year bonds at 97. The bonds are callable at 103. Linen has recorded amortization of the bond premium by the straight-line method. On December 31, 2025, Linen repurchased $ 200,000 of the bonds in the open market at 103. Bond interest expense and premium amortization have not been recorded for 2025. Prepare the journal entries for December 31, 2025.

TR issues 6.9%, 5-year bonds with a total face amount of $1,000,000. The market interest rate...

TR issues 6.9%, 5-year bonds with a total face amount of $1,000,000. The market interest rate for bonds of similar risk and maturity is 6.8%. Interest is paid semi-annually. DO NOT ROUND YOUR ANSWERS UNTIL YOU FULLY COMPLETE THE PROBLEM SET (input your answers after you’ve completed the entire problem). 4. $___________ (rounded to nearest dollar). What is the issue price of the bond? 5. $___________ (rounded to nearest dollar). When the company records the first interest payment, how much...

Blossom Company issues $1,000,000, 10-year, 6% bonds at 92, with interest payable each January 1.

Brief Exercise 15-04 a-bBlossom Company issues $1,000,000, 10-year, 6% bonds at 92, with interest payable each January 1.Prepare the journal entry to record the sale of these bonds on January 1, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)DateAccount Titles and ExplanationDebitCreditJan. 1Assuming instead that the above bonds sold for 101, prepare the journal entry to record the sale of these bonds on January 1, 2020. (Credit account titles are automatically indented when amount is...

A company issues $1,000,000 of 20-year 10% bonds that pay interest semiannually. The market rate for...

A company issues $1,000,000 of 20-year 10% bonds that pay interest semiannually. The market rate for bonds of similar risk is 9%. Prepare the journal entries to record the issuance of the bond and the first two interest payments. : Please walk through interest journal entries

On January 1, 2019 Lightfoot Corporation issues 10%, 5-year bonds with a face value of $275,000...

On January 1, 2019 Lightfoot Corporation issues 10%, 5-year bonds with a face value of $275,000 when the effective interest rate is 9%. Interest is to be paid semiannually on June 30 and December 31. Lightfoot uses the effective interest method to amortize the premium on June 30, 2019. Prepare the journal entry to record the first interest payment on June 30, 2019.

1. MAX holds bonds with a face value of 1,000,000$, an 8% interest rate (payment once...

1. MAX holds bonds with a face value of 1,000,000$, an 8% interest rate (payment once a year) and a remaining maturity of four years. Answer the following question. (1) If the market price of the bond is 1,150,000$, what is the maturity yield on the bond? (2) If the maturity yield on the bond is 10%, what is the appropriate price for this bond? (3) Assuming that you pay this ticket twice a year, put in preceding questions (1),...

A company issues bonds with a par value of $10,000,000 on January 1, 2013. The bonds...

A company issues bonds with a par value of $10,000,000 on January 1, 2013. The bonds have an annual coupon rate of 5%, pay interest semi-annually, and will mature in 5 years. If the market rate of interest on the bonds is 6% per year, then what is the interest expense that the company will report for the year ending December 31, 2015? [Note: the company uses the effective interest method of amortization.]

Subjects