Question

att Winne

issued

$ 600 comma 000$600,000

of

1717?%,

1010?-year

bonds payable on January? 1,

20162016.

The market interest rate at the date of issuance was

1414?%,

and the bonds pay interest semiannually.

LOADING...

?(Click the icon to view the Present Value of? $1 table.)

LOADING...

?( Click the icon to view thePresent Value of Annuity of? $1 table.)

LOADING...

?(Click the icon to view the Future Value of? $1 table.)          

LOADING...

?(Click the icon to view the Future Value of Annuity of? $1 table.)Read the requirements

LOADING...

.

Requirement 1. How much cash did the company receive upon issuance of the bonds? payable? ?(Use the factor tables provided with factors rounded to three decimal places. Round all currency amounts to the nearest whole? dollar.)

Upon issuance of the bonds? payable, the company received

?$nothing .

Requirement 2. Prepare an amortization table for the bond using the? effective-interest method, through the first two interest payments. ?(Round all numbers to the nearest whole? dollar.)

	Save Accounting Table...			+
	Copy to Clipboard...			+

		Interest		Carrying
	Cash Paid	Expense	Amortized	Amount
01/01/2016
06/30/2016
12/31/2016

Requirement 3. Journalize the issuance of the bonds on January? 1,

20162016?,

and payment of the first semiannual interest amount and amortization of the bond on June? 30,

20162016.

Explanations are not required. ?(Record debits? first, then credits. Exclude explanations from any journal? entries.)Start by journalizing the issuance of the bonds on January? 1,

20162016.

? (Prepare a single compound? entry.)

??

	Save Accounting Table...			+
	Copy to Clipboard...			+

Date			Accounts	Debit	Credit
2016
Jan. 1

Journalize the payment of the first semiannual interest amount and amortization of the bond on June? 30,

20162016.

? (Prepare a single compound? entry.)

	Save Accounting Table...			+
	Copy to Clipboard...			+

Date			Accounts	Debit	Credit
2016
Jun. 30

Answer 1

Face Value of Bond	600,000
Bond Coupon Rate	17%
Market Interest Rate	14%
Semi-Annual Interest Rate	8.50%
Semi-Annual interest	51,000
Bond Maturity	10 Year

Please note that Data in question is scattered but I tried to Summarize it in above table and solved based on above numbers. Please let me know if any changes in the above number.

Requirement 1
Bond Issue Price
Period	Cashflow	Discounting Factor(7%)	Present Value
1	51,000	0.935	47,685
2	51,000	0.873	44,523
3	51,000	0.816	41,616
4	51,000	0.763	38,913
5	51,000	0.713	36,363
6	51,000	0.666	33,966
7	51,000	0.623	31,773
8	51,000	0.582	29,682
9	51,000	0.544	27,744
10	51,000	0.508	25,908
11	51,000	0.475	24,225
12	51,000	0.444	22,644
13	51,000	0.415	21,165
14	51,000	0.388	19,788
15	51,000	0.362	18,462
16	51,000	0.339	17,289
17	51,000	0.317	16,167
18	51,000	0.296	15,096
19	51,000	0.277	14,127
20	51,000	0.258	13,158
20	600,000	0.258	154,800
Bond Issue Price			695,094

Requirement 2
Period	Cash Paid	Interest expenses	Carrying Amount	Premium Amortization
0			695,094	-
1	51,000	48,657	692,751	2,343
2	51,000	48,493	690,243	2,507

Requirement 3
Date	Account description	Debit	Credit
1-Jan	Cash	695,094
	Bond Payable		600,000
	Premium on Issue of Bond		95,094
30-Jun	Interest Expenses	48,657
	Amortization of premium	2,343
	Cash		51,000

Dear Student,

Best effort has been made to give quality and correct answer. But if you find any issues please comment your concern. I will definitely resolve your query.

Also please give your positive rating.