Question
In: Accounting
On January 1, the first day of the fiscal year pretenders company issued $24,200 of five...
On
January 1, the first day of the fiscal year pretenders company
issued $24,200 of five years, 11% bonds to finance its operations
of producing and selling home improvement products. Interest is
payable semiannually. The bonds were issued at a market (
effective) interest rate of 13% resulting in pretender company
receiving cash of $22,460,399
A. Journalize the entries to record the following
1. Issuance of the bond
2. First semiannual interest payment. The bond discount is
combined with the semiannual interest payment
3. Second semiannual interest. the bond discount is combined
with the semiannual interest payment.
B. Determine the amount of the bond interest expense for the
first year.
C. Explain why the company was able to issue bonds for only
$22,460,399 rather than for the face amount of $24,200,00
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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On January 1, the first day of its fiscal year, Pretender
Company issued $18,500,000 of five-year, 10% bonds to finance its
operations of producing and selling home improvement products.
Interest is payable semiannually. The bonds were issued at a market
(effective) interest rate of 12%, resulting in Pretender Company
receiving cash of $17,138,298.
Required:
A.
Journalize the entries to
record the following (refer to the Chart of Accounts for exact
wording of account titles):
1.
Issuance of the
bonds.
2....
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On January 1, the first day of its fiscal year, Pretender
Company issued $18,400,000 of five-year, 12% bonds to finance its
operations of producing and selling home improvement products.
Interest is payable semiannually. The bonds were issued at a market
(effective) interest rate of 14%, resulting in Pretender Company
receiving cash of $17,107,672.
Required:
A.
Journalize the entries to
record the following (refer to the Chart of Accounts for exact
wording of account titles):
1.
Issuance of the
bonds.
2....
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Issuance of the
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