Question
In: Accounting
On September 30, Jose’s Jalapenos Inc., issued $1,000,000 of 10-year 9% bonds sated September 30, for...
On September 30, Jose’s Jalapenos Inc., issued $1,000,000 of 10-year 9% bonds sated September 30, for $1,067,950 an effective (market) rate of 8%. Interest is payable semi-annually on October 1 and April 1. The bonds were purchased by Juan’s Junk and Basura Inc. Present the entries to record the following transactions for the current year on BOTH sets of books: (Issuing Corporation and Investor) a) Issuance of bonds b) Accrual of interest and amortization for the period ended December 31. Use the effective interest method for the amortization not the straight-line method. c) Redemption of the bonds on January 1 at 102. PLEASE ANSWER BOTH SETS OF BOOKS. INCLUDING THE INVESTORS BOOKS
Solutions
Expert Solution
| (a) | Date | General Journal | Debit | Credit | ||
| Sep 30 | Cash | 1,067,950 | ||||
| Bonds payable | 1,000,000 | |||||
| Premium on bonds payable | 67,950 | |||||
| (b) | ||||||
| Payment Date | Cash Payment | Interest Exp. | Amortization of bond premium | Carrying Value | ||
| Sep 30, year | 1,067,950 | |||||
| April 1, year 1 | 45,000 | 42,718 | 2,282 | 1,065,668 | ||
| Oct 1, year 1 | 45,000 | 42,627 | 2,373 | 1,063,295 | ||
| Dec 31 | Interest Expense | 21,359 | (1,067,950 x 8% x 1/2 x 3/6) | |||
| Premium on bonds payable | 1,141 | |||||
| Interest Payable | 22,500 | (1,000,000 x 9% x 1/2 x 3/6) | ||||
| (c) | Jan 1 | Bonds Payable | 1,000,000 | |||
| Premium on bonds payable | 66,809 | (67,950 - 1,141) | ||||
| Cash | 1,020,000 | (1,000,000 x 102/100) | ||||
| Gain on redemption | 46,809 |
ekkarill92 answered 1 year agoRelated Solutions
On September 30, Jose’s Jalapenos Inc., issued $1,000,000 of 10-year 9% bonds sated September 30, for...
On September 30, Jose’s Jalapenos Inc., issued $1,000,000 of
10-year 9% bonds sated September 30, for $1,067,950 an effective
(market) rate of 8%. Interest is payable semi-annually on October 1
and April 1. The bonds were purchased by Juan’s Junk and Basura
Inc. Present the entries to record the following transactions for
the current year on BOTH sets of books: (Issuing Corporation and
Investor)
Issuance of bonds
Accrual of interest and amortization for the period ended
December 31. Use the...
On September 30, Jose’s Jalapenos Inc., issued $1,000,000 of 10-year 9% bonds sated September 30, for...
On September 30, Jose’s Jalapenos Inc., issued $1,000,000 of
10-year 9% bonds sated September 30, for $1,067,950 an effective
(market) rate of 8%. Interest is payable semi-annually on October 1
and April 1. The bonds were purchased by Juan’s Junk and Basura
Inc. Present the entries to record the following transactions for
the current year on BOTH sets of books: (Issuing Corporation and
Investor) a) Issuance of bonds b) Accrual of interest and
amortization for the period ended December 31....
Problem 1: On September 30, Jose’s Jalapenos Inc., issued $1,000,000 of 10-year 9% bonds sated September...
Problem 1:
On September 30, Jose’s Jalapenos Inc., issued $1,000,000 of
10-year 9% bonds sated September 30, for $1,067,950 an effective
(market) rate of 8%. Interest is payable semi-annually on October 1
and April 1. The bonds were purchased by Juan’s Junk and Basura
Inc. Present the entries to record the following transactions for
the current year on BOTH sets of books: (Issuing Corporation and
Investor)
a) Issuance of bonds
b) Accrual of interest and amortization for the period ended...
P 16-9 on september 30,2017, Gargiola inc. Issued 4millions of 10 year, 8% convertible bonds for...
P 16-9 on september 30,2017, Gargiola inc. Issued 4millions of
10 year, 8% convertible bonds for 4.6millions. The bonds pay
interest on march 31 and September 30 and mature on September 30,
2027. Each 1000$ bond can be converted into 80 no par value common
shares. In addition, each bond include 20 detachable warrants. Each
warrant can be used to purchase one common share at an exercise
price of 15$. Immediately after the bond issuance, the warrants
traded at 3$...
Please answer the following question Travel In Style Limited issued $1,000,000 of 9% bonds on September...
Please answer the following question
Travel In Style Limited issued $1,000,000 of 9% bonds on
September 1, 2017 for $1,058,671. The term of the bonds is
September 1, 2017 to September 1, 2025, with interest payable
quarterly each December 1, March 1, June 1, and September 1. The
company uses the effective interest method with an effective rate
of 8%.
1) Prepare the company’s journal entry for the September 1
issuance.
2) Prepare the company’s journal entry for the December...
on september 30,2017, Gargiola inc. Issued 4millions of 10 year, 8% convertible bonds for 4.6millions. The...
on september 30,2017, Gargiola inc. Issued 4millions of 10 year,
8% convertible bonds for 4.6millions. The bonds pay interest on
march 31 and September 30 and mature on September 30, 2027. Each
1000$ bond can be converted into 80 no par value common shares. In
addition, each bond include 20 detachable warrants. Each warrant
can be used to purchase one common share at an exercise price of
15$. Immediately after the bond issuance, the warrants traded at 3$
each. Without...
on september 30,2017, Gargiola inc. Issued 4millions of 10 year, 8% convertible bonds for 4.6millions. The...
on september 30,2017, Gargiola inc. Issued 4millions of 10 year,
8% convertible bonds for 4.6millions. The bonds pay interest on
march 31 and September 30 and mature on September 30, 2027. Each
1000$ bond can be converted into 80 no par value common shares. In
addition, each bond include 20 detachable warrants. Each warrant
can be used to purchase one common share at an exercise price of
15$. Immediately after the bond issuance, the warrants traded at 3$
each. Without...
On July 1, Year 1, Danzer Industries Inc. issued $1,300,000 of 9-year, 10% bonds at a...
On July 1, Year 1,
Danzer Industries Inc. issued $1,300,000 of 9-year, 10% bonds at a
market (effective) interest rate of 11%, receiving cash of
$1,226,906. Interest on the bonds is payable semiannually on
December 31 and June 30. The fiscal year of the company is the
calendar year.
Required:
1.
Journalize the entry to record the amount of cash proceeds from the
issuance of the bonds on July 1, Year 1. If an amount box does not
require an...
On July 1, Year 1, Danzer Industries Inc. issued $1,900,000 of 10-year, 9% bonds at a...
On July 1, Year 1, Danzer Industries Inc. issued $1,900,000 of
10-year, 9% bonds at a market (effective) interest rate of 10%,
receiving cash of $1,781,610. Interest on the bonds is payable
semiannually on December 31 and June 30. The fiscal year of the
company is the calendar year.
Required:
1. Journalize the entry to record the amount of
cash proceeds from the issuance of the bonds on July 1, Year 1. If
an amount box does not require an...
On July 1, Year 1, Danzer Industries Inc. issued $48,800,000 of 10-year, 9% bonds at a...
On July 1, Year 1, Danzer Industries Inc. issued $48,800,000 of
10-year, 9% bonds at a market (effective) interest rate of 11%,
receiving cash of $42,968,258. Interest on the bonds is payable
semiannually on December 31 and June 30. The fiscal year of the
company is the calendar year. Required: 1. Journalize the entry to
record the amount of cash proceeds from the issuance of the bonds
on July 1, Year 1.* 2. Journalize the entries to record the
following:*...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- You have been hired as a capital budgeting analyst by Advent Sports, a sporting goods firm...
- DESCRIBE WHAT HAPPENS WHEN WE BECOME CONSCIOUS OF SOMETHING. WHAT HAS TO HAPPEN FOR CONSCIOUS AWARENESS...
- 3) You are rolling a 12 sided die 8 times. a) What is the size for...
- explain the difference between quantitative and qualitative research strategies. Provide an example of a crime based...
- use postorder and inorder tree traversals to make preorder traversal. #!/usr/bin/env python3 # encoding: UTF-8 """Turning...
- 1. Write an if-else statement to describe an object. Print "Balloon" if isBalloon is true and...
- An investor is considering purchasing a Treasury bond with a 20 year maturity, an 8% coupon...
ADVERTISEMENT