The Kell Company issued $600,000 of 10 year, 12% bonds at 99. The bonds were issued...

The Kell Company issued $600,000 of 10 year, 12% bonds at 99. The bonds were issued on January 1, 20x1, with interest payable semiannually on June 30 and December 31.

REQUIRED: Present the journal entries for each of the following:

The issuance of the bonds.

The payment of interest for the first six months.

Amortization for the first six months.

The retirement of 1/2 the bonds at 102 on January 1, 20x5.

Expert Solution

Par value of bonds			6,00,000
Issue price of bonds (600,000*99%)	594000
Discount on bonds			6000
Divide: Number of periods		10
Discount amortized each period		600

Discount amortized till 01.01.05 (600*8)	4800
Unamortized Discount on 01.01.05	1200

Journal entries
S.no.	Accounts title and explanations		Debit $	Credit $
01.01.01	Cash account			594000
	Discount on bonds payable		6000
	Bonds payable				600000
	(for issuance of bonds)
30.06.01	Interest expenses (600,00012%6/12)	36000
	Cash					36000
	(for payment of interest)
30.06.01	Interest expense			600
	Discount on bonds payable			600
	(for amortization of discount)

01.01.05	Bonds payable (600,000*1/2)		3,00,000
	Loss on redemption of bonds		6600
	Discount on Bonds payable (1200*1/2)		600
	Cash account (300,000*102%)		306000
	(for redemption of bonds)

ekkarill92 answered 2 years ago

2. A company issued 10%, 5-year bonds with a par value of $600,000. The market rate...

2. A company issued 10%, 5-year bonds with a par value of $600,000. The market rate when the bonds were issued was 8%. The company received $613,600 cash for the bonds. What is the semi-annual Bond Interest Expense?

Arroyo Company issued $600,000, 10-year, 6% bonds at 103. Instructions (a) Prepare the journal entry to...

Arroyo Company issued $600,000, 10-year, 6% bonds at 103. Instructions (a) Prepare the journal entry to record the sale of these bonds on January 1, 2017. (b) Suppose the remaining Premium on Bonds Payable was $10,800 on December 31, 2020. Show the balance sheet presentation on this date. (c) Explain why the bonds sold at a price above the face amount.

Exercise 10-10 Whitmore Company issued $408,500 of 5-year, 7% bonds at 99 on January 1, 2017....

Exercise 10-10 Whitmore Company issued $408,500 of 5-year, 7% bonds at 99 on January 1, 2017. The bonds pay interest annually. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit SHOW LIST OF ACCOUNTS Compute the total cost of borrowing for these bonds . Total cost of borrowing $____________ SHOW LIST OF ACCOUNTS Prepare the journal entry to...

Larry Company issued 10 year, 6% bonds with a face value of $1,000,000. The bonds were...

Larry Company issued 10 year, 6% bonds with a face value of $1,000,000. The bonds were sold to yield 7%. Interest is payable semi-annually on January 1 and July 1. Effective rate amoritization is to be used. 1. What is the issue price of the bonds? 2. Prepare an amortization table for the entire bond term. Table should be properly labeled. Amounts should be rounded to the nearest dollar. 3. Record the bond issuance on 1/1/18 Accounts Debit Credit 4....

Harrison Company issued $600,000 of 10%, 20-year bonds on January 1, 2020. Interest is paid semiannually...

Harrison Company issued $600,000 of 10%, 20-year bonds on January 1, 2020. Interest is paid semiannually on July 1 and December 31 each year. Harrison Company uses the straight-line method of amortization for bond premium or discount. B. Assume the bonds are issued at 100. Provide the journal entries for the issuance of the bonds and the first two interest payments. (3 points)

2. Capital Company issued $600,000, 10%, 20-year bonds on January 1, 2020, at 103. Interest is...

2. Capital Company issued $600,000, 10%, 20-year bonds on January 1, 2020, at 103. Interest is payable semiannually on July 1 and January 1. The effective interest rate is 8%. Capital uses the straight-line method of amortization and has a calendar year end. Instructions: Prepare all journal entries made in 2020 related to the bond issue.

On January 2, 2018, Phi Company sold $600,000 10% 4-year bonds for $562,740 to yield 12%....

On January 2, 2018, Phi Company sold $600,000 10% 4-year bonds for $562,740 to yield 12%. Interest is payable semi-annually on June 30th and December 31st and each bond is convertible into 18 common stock shares ($7 par value.) Required: (a) Assume 100% of the bonds are converted on July 1, 2019. Prepare the journal entry to record the conversion. (b) Assume $360,000 of the bonds are converted on July 1, 2019. Prepare the necessary journal entry.

On January 31, 2021, B Corp. issued $600,000 face value, 12% bonds for $600,000 cash. The...

On January 31, 2021, B Corp. issued $600,000 face value, 12% bonds for $600,000 cash. The bonds are dated December 31, 2020, and mature on December 31, 2030. Interest will be paid semiannually on June 30 and December 31. What amount of cash received should B report at january 31, 2021

Windsor Inc. issued $3,840,000 of 10%, 10-year convertible bonds on June 1, 2020, at 99 plus...

Windsor Inc. issued $3,840,000 of 10%, 10-year convertible bonds on June 1, 2020, at 99 plus accrued interest. The bonds were dated April 1, 2020, with interest payable April 1 and October 1. Bond discount is amortized semiannually on a straight-line basis. On April 1, 2021, $1,440,000 of these bonds were converted into 35,000 shares of $21 par value common stock. Accrued interest was paid in cash at the time of conversion. (a) Prepare the entry to record the interest...

Doyle Company issued $390,000 of 10-year, 9 percent bonds on January 1, 2018. The bonds were...

Doyle Company issued $390,000 of 10-year, 9 percent bonds on January 1, 2018. The bonds were issued at face value. Interest is payable in cash on December 31 of each year. Doyle immediately invested the proceeds from the bond issue in land. The land was leased for an annual $56,500 of cash revenue, which was collected on December 31 of each year, beginning December 31, 2018. A) Prepare the income statement, balance sheet, and statement of cash flows for 2018...

Question