Apple Corporation issued $360,000 of 6%,10-year bonds on January 1,2021,for $311,076.

Apple Corporation issued $360,000 of 6%,10-year bonds on January 1,2021,for $311,076. This price provided a yield of 8%on the bonds. Interest is payable semiannually on June 30 and December 31. If Apple uses the effective-interest method and the fiscal year-end is on October 31, the amount of interest expense reported on the income statement for the year ended October 31,

2021 should be:

Expert Solution

Interest expense till June 30 = Book Value of Bond * Yield /2

Interest expense till June 30 = 311076 * 8%/2

Interest expense till June 30 = $12443.04

Interest Expense from June 30 to Oct 31 = (Book Value of Bond + (Interest expense till June 30 - Coupon Paid)) * Yield / 4

Interest Expense from June 30 to Oct 31 = (311076 + (12443.04 - 10800)) * 8% / 4

Interest Expense from June 30 to Oct 31 = 6254.38

Answer: The amount of interest expense reported on the income statement for the year ended October 31 = $18697.42 (12443.04 + 6254.38)

jeff jeffy answered 2 years ago

On January 1,2021, Apple Company issued $840,000 of 8%,10-year bonds for 97.

On January 1,2021, Apple Company issued $840,000 of 8%,10-year bonds for 97. Apple retired all of these bonds on January 1,2022, at 102. If Apple uses the straight-line amortization, how much loss should be recognized on this bond retirement?

Sunrise Corporation issued$300,000 of 6%,10-year bonds on January 1,2021,for$311,076.This price provided a yield of 8%on the...

Sunrise Corporation issued$300,000 of 6%,10-year bonds on January 1,2021,for$311,076.This price provided a yield of 8%on the bonds.Interest is payable semiannually on June 30 and December 31.If Sunrise uses the effective-interest method and fiscal year-end is on October 31,the amount of interest expense reported on the income statement for the year ended October 31, 2021 should be:

Dublin Company sold$1,200,000 of 8%,10-year bonds at 97 on January 1,2021.The bonds were dated January 1,2021...

Dublin Company sold$1,200,000 of 8%,10-year bonds at 97 on January 1,2021.The bonds were dated January 1,2021 and pay interest on June 30 and December 31.If Dublin uses the straight-line amortization,what would the total interest expense recognized for the bond issue over its full term?

On January 1, 2022, Swifty Corporation issued $1,810,000 face value, 6%, 10- year bonds at $1,682,873....

On January 1, 2022, Swifty Corporation issued $1,810,000 face value, 6%, 10- year bonds at $1,682,873. This price resulted in an effective-interest rate of 7% on the bonds. Swifty uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest January 1. Prepare the journal entry to record the issuance of the bonds on January 1, 2022. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do...

The Rockstar Corporation issued 10-year $900,000 par 6% convertible bonds on January 1, 2018 at 98....

The Rockstar Corporation issued 10-year $900,000 par 6% convertible bonds on January 1, 2018 at 98. The bonds have a par value of $1,000 with interest payable annually. Each bond is convertible into 10 shares of common stock; in two years this ratio will increase, meaning that each bond will be convertible into 30 shares of common stock. Assume Rockstar uses straight-line amortization for its bonds and that its effective tax rate is 35%. Net income in 2018 is $2,600,000...

On January 1, 2018, Noriyal Manufacturing Corporation issued$5,000,000, 10%, 6-year bonds dated January 1, 2018,...

On January 1, 2018, Noriyal Manufacturing Corporation issued $5,000,000, 10%, 6-year bonds dated January 1, 2018, at 105. The bonds pay semi-annual interest on January 1 and July 1. The company uses the straight-line method ofamortization and has a December 31, year end. Instructions: Prepare the journal entries to record the following: 1. The issuance of bonds on January 1, 2018. 2. The payment of interest and the discount (or premium) amortization on July 1, 2018. 3. The accrual of...

On January 1, 2012, Corporation A issued $18,000,000 of 10% ten-year bonds at 103. The bonds...

On January 1, 2012, Corporation A issued $18,000,000 of 10% ten-year bonds at 103. The bonds are callable at the option of Corporation A at 105. Corporation A has recorded amortization of the bond premium on the straight line method. On December 31, 2018, when the fair value of the bonds was 96, Corporation A repurchased $4,000,000 if the bonds in the open market at 96. Corporation A has recorded interest and amortization for 2018. What amount of gain/loss(ignoring income...

Doyle Company issued $420,000 of 10-year, 6 percent bonds on January 1, Year 2. The bonds...

Doyle Company issued $420,000 of 10-year, 6 percent bonds on January 1, Year 2. 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 $57,500 of cash revenue, which was collected on December 31 of each year, beginning December 31, Year 2. b. Prepare the income statement, balance sheet, and statement of cash flows...

The Kingbird Company issued $360,000 of 11% bonds on January 1, 2020. The bonds are due...

The Kingbird Company issued $360,000 of 11% bonds on January 1, 2020. The bonds are due January 1, 2025, with interest payable each July 1 and January 1. The bonds were issued at 102. Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Kingbird Company records straight-line amortization semiannually. (a) choose a transaction date Jan. 1, 2020July 1, 2020Dec. 31, 2020 enter an account title enter a debit amount enter a credit...

1. On January 1, 2020, Travis Corporation issued $800,000, 6%, 5-year bonds for $735,110. The bonds...

1. On January 1, 2020, Travis Corporation issued $800,000, 6%, 5-year bonds for $735,110. The bonds were sold to yield an effective-interest rate of 8%. Interest is paid semiannually on July 1 and January 1. The company uses the effective-interest method of amortization. Instructions: Prepare the journal entries that Travis Corporation would make on January 1, June 30, December 31, 2020, January 1, 2021 and at maturity, related to the bond issue

Question