Question
In: Finance
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?
Solutions
Expert Solution
Discount on issue of bonds = Par value of bonds - Cash received from issuance of bonds
Discount on issue of bonds = $1,200,000 - ($1,200,000 * 0.97)
Discount on issue of bonds = $36,000
Total Interest Expenses recognized for the bond issue over its full term = Discount + Interest paid in cash
Total Interest Expenses recognized for the bond issue over its full term = $36,000 + ($1,200,000 * 0.08 * 10)
Total Interest Expenses recognized for the bond issue over its full term = $996,000
jeff jeffy answered 3 years agoRelated Solutions
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?
Saylor Co. sold $3,000,000, 8%, 10-year bonds on January 1, 2017. The bonds were dated January...
Saylor Co. sold $3,000,000, 8%, 10-year bonds on
January 1, 2017. The bonds were dated January 1, 2017, and pay
interest on January 1. The company uses straight-line amortization
on bond premiums and discounts. Financial statements are prepared
annually.
a. Prepare the journal entries to record the issuance of the bonds
assuming they sold at: (1) 103 and (2) 98.
b. Prepare an amortization table for issuance of the bonds sold at
103 for the first three interest payments.
c....
Blackberry Corporation sold $2,500,000 of 10 year 8% bonds on January 1, 2018. The bonds were dated...
Blackberry Corporation sold $2,500,000 of 10 year 8% bonds on
January 1, 2018. The bonds were dated January 1, 2018
and pay interest on July 1 and January 1. Blackberry
uses the straight-line method to amortize and bond premium or
discount. Blackberry’s year end is December 31.
Instructions:
a. Prepare
all the necessary journal entries to record the issue of the bonds
and bond interest expense for 2018, assuming:
1. that
the bonds sold at 100 (face value)
2. that
the bonds sold at 103
3. that...
Blossom Company sold $3,100,000, 7%, 10-year bonds on January 1, 2022. The bonds were dated January...
Blossom Company sold $3,100,000, 7%, 10-year bonds on January 1,
2022. The bonds were dated January 1, 2022, and pay interest on
January 1. The company uses straight-line amortization on bond
premiums and discounts. Financial statements are prepared
annually.
Prepare the journal entries to record the issuance of the bonds
assuming they sold at: (1) 101 and (2) 95. (Credit
account titles are automatically indented when amount is entered.
Do not indent manually.)
Prepare amortization table for issuance of the...
Blossom Company sold $3,100,000, 7%, 10-year bonds on January 1, 2022. The bonds were dated January...
Blossom Company sold $3,100,000, 7%, 10-year bonds on January 1,
2022. The bonds were dated January 1, 2022, and pay interest on
January 1. The company uses straight-line amortization on bond
premiums and discounts. Financial statements are prepared
annually.
Prepare the journal entries to record the issuance of the bonds
assuming they sold at: (1) 101 and (2) 95. (Credit
account titles are automatically indented when amount is entered.
Do not indent manually.)
Prepare amortization table for issuance of the...
Fernetti Company sold $6,000,000, 9%, 10-year bonds on January 1, 2014. The bonds were dated January...
Fernetti Company sold $6,000,000, 9%, 10-year bonds on January
1, 2014. The bonds were dated January 1, 2014, and pay interest on
January 1 and July 1. Fernetti Company uses the straight-line
method to amortize bond premium or discount. The bonds were sold at
96. Assume no interest is accrued on June 30.
Instructions
(a) Prepare all the necessary journal entries to record the
issuance of the bonds and bondinterest expense for 2014, assuming
that the bonds sold at 102.(b)...
Kershaw Electric sold $4,600,000, 10%, 10-year bonds on January 1, 2017. The bonds were dated January...
Kershaw Electric sold $4,600,000, 10%, 10-year bonds on January
1, 2017. The bonds were dated January 1, 2017, and paid interest on
January 1. The bonds were sold at 95.
At December 31, 2017, $8,100 of the Discount on Bonds Payable
account has been amortized. Show the balance sheet presentation of
the long-term liability at December 31, 2017.
On January 1, 2019, when the carrying value of the bonds was
$4,386,200, the company redeemed the bonds at 103. Record the...
Kershaw Electric sold $6,000,000, 10%, 10-year bonds on January 1, 2020. The bonds were dated January...
Kershaw Electric sold $6,000,000, 10%, 10-year bonds on January
1, 2020. The bonds were dated January 1, 2020, and paid interest on
January 1. The bonds were sold at 98.
Prepare entries to record issuance of bonds, interest
accrual, and bond redemption.
Instructions
Prepare the journal entry to record the issuance of the bonds
on January 1, 2020.
At December 31, 2020, $8,000 of the Discount on Bonds Payable
account has been amortized. Show the balance sheet presentation of
the...
Jack's Electric sold $4,495,000, 13%, 10-year bonds on January 1, 2020. The bonds were dated January...
Jack's Electric sold $4,495,000, 13%, 10-year bonds on January
1, 2020. The bonds were dated January 1, 2020, and paid interest on
January 1. The bonds were sold at 98.
Prepare the journal entry to record the issuance of the bonds on
January 1, 2020.
At December 31, 2020, $7,500 of the Discount on Bonds Payable
account has been amortized. Show the balance sheet presentation of
the long-term liability at December 31, 2020.
On January 1, 2022, when the carrying...
Wildhorse Co. sold $3,200,000, 9%, 10-year bonds on January 1, 2022. The bonds were dated January...
Wildhorse Co. sold $3,200,000, 9%, 10-year bonds on January 1,
2022. The bonds were dated January 1, 2022, and pay interest on
January 1. The company uses straight-line amortization on bond
premiums and discounts. Financial statements are prepared annually.
Prepare the journal entries to record interest expense for 2022
under both of the bond issuances assuming they sold at: (1) 101 and
(2) 98. Show the long-term liabilities balance sheet presentation
for issuance of the bonds sold at 101 at...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Problem 1: In the figure to the right, m1=20.0kg and α=53.1o . The coefficient of kinetic...
- A palindrome is a string whose reversal is identical to the string. For example, 110010011 is...
- Explain how the shape of the load duration curve for a particular system affects the selection...
- For physics discussion post. Please TYPE the response as I struggle with reading written information. Explain...
- Consider a file system using a multi-level indexing scheme in inodes as the file organization. In...
- 1a) A sample of a new cleaning product, "Joe's Famous Bleach Cleaner," with a mass of...
- TRANSPARANT DATA ENCRYPTION TOPIC INTRODUCTION 150WORDS, DESCRIPTION 250 WORDS, CONCLUTION 150 WORDS USE OWN WORDS 500 WORDS....
ADVERTISEMENT