Question
In: Accounting
Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1, Danzer Industries Inc. issued...
Bond Discount, Entries for Bonds Payable Transactions
On July 1, Year 1, Danzer Industries Inc. issued $7,700,000 of 5-year, 9% bonds at a market (effective) interest rate of 10%, receiving cash of $7,402,686. 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 entry, leave it blank.
2. Journalize the entries to record the following: If an amount box does not require an entry, leave it blank.
a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond discount, using the straight-line method. (Round your answer to the nearest dollar.)
b. The interest payment on June 30, Year 2, and the amortization of the bond discount, using the straight-line method. (Round your answer to the nearest dollar.)
3. Determine the total interest expense for
Year 1. Round to the nearest dollar.
$
4. Will the bond proceeds always be less than
the face amount of the bonds when the contract rate is less than
the market rate of interest?
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1, Danzer Industries Inc. issued...
Bond Discount, Entries for Bonds Payable Transactions
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receiving cash of $1,153,665. 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...
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On July 1, Year 1, Danzer Industries Inc. issued $6,900,000 of
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receiving cash of $6,569,162. 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...
Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1, Danzer Industries Inc. issued...
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On July 1, Year 1, Danzer Industries Inc. issued $6,700,000 of
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receiving cash of $6,336,925. 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...
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Bond Discount, Entries for Bonds Payable Transactions
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5-year, 9% bonds at a market (effective) interest rate of 10%,
receiving cash of $2,403,470. 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...
Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1, Danzer Industries Inc. issued...
Bond Discount, Entries for Bonds Payable Transactions
On July 1, Year 1, Danzer Industries Inc. issued $4,100,000 of
7-year, 9% bonds at a market (effective) interest rate of 11%,
receiving cash of $3,706,827. 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...
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On July 1, 20Y1, Livingston Corporation, a wholesaler of
manufacturing equipment, issued $30,000,000 of 20-year, 11% bonds
at a market (effective) interest rate of 14%, receiving cash of
$24,001,800. Interest on the bonds is payable semiannually on
December 31 and June 30. The fiscal year of the company is the
calendar year.
Required:
For all journal entries, if an amount box does not require an
entry, leave...
Bond Discount, Entries for Bonds Payable Transactions, Interest Method of Amortizing Bond Discount On July 1,...
Bond Discount, Entries for Bonds Payable Transactions, Interest
Method of Amortizing Bond Discount On July 1, 20Y1, Livingston
Corporation, a wholesaler of manufacturing equipment, issued
$37,000,000 of 20-year, 11% bonds at a market (effective) interest
rate of 14%, receiving cash of $29,602,220. Interest on the bonds
is payable semiannually on December 31 and June 30. The fiscal year
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entries, if an amount box does not require an entry, leave...
Solve the following problem. Bond discount, entries for bonds payable transactions On July 1, Year 1,...
Solve the following problem.
Bond discount, entries
for bonds payable transactions
On July 1, Year 1, Danzer Industries Inc. issued $43,200,000 of
10-year, 9% bonds at a market (effective) interest rate of 10%,
receiving cash of $40,508,184. 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...
Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1, Livingston Corporation, a wholesaler...
Bond Discount, Entries for Bonds Payable Transactions
On July 1, Year 1, Livingston Corporation, a wholesaler of
manufacturing equipment, issued $3,800,000 of 8-year, 10% bonds at
a market (effective) interest rate of 11%, receiving cash of
$3,601,220. 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...
Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1, Livingston Corporation, a wholesaler...
Bond Discount, Entries for Bonds Payable Transactions
On July 1, Year 1, Livingston Corporation, a wholesaler of
manufacturing equipment, issued $5,300,000 of 8-year, 9% bonds at a
market (effective) interest rate of 10%, receiving cash of
$5,012,800. 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...
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