Question

In: Accounting

Declension Company sold bonds that had a face (maturity) value of $1,000,000 on May 1, 2019...

Declension Company sold bonds that had a face (maturity) value of $1,000,000 on May 1, 2019 for $900,000. The bonds had a 10 year term with a maturity date of April 30, 2029. The annual interest rate on the bonds is 12 percent which is paid semiannually each October 31 and April 30. What entries should Declension Company make on a. issuance of the bond on May 1, 2019 b. on payment of interest on October 31, 2019 c. on the accrual of interest on the fiscal year end December 31, 2019? D On retirement of the bond at 102 on December 31, 2019.

Solutions

Expert Solution

Journal Entries:

Journal Entries:

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Declension Company sold bonds that had a face (maturity) value of $1,000,000 on May 1, 2019...
Declension Company sold bonds that had a face (maturity) value of $1,000,000 on May 1, 2019 for $900,000. The bonds had a 10 year term with a maturity date of April 30, 2029. The annual interest rate on the bonds is 12 percent which is paid semiannually each October 31 and April 30. What entries should Declension Company make on a. issuance of the bond on May 1, 2019 b. On payment of interest on October 31, 2019 c. On...
On January 1, 2020, Spalding Company sold 12% bonds having a maturity value of $1,000,000 for...
On January 1, 2020, Spalding Company sold 12% bonds having a maturity value of $1,000,000 for $1,075,815, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2020 and they mature on January 1, 2025, with semiannual interest payable on July 1 and January 1 each year. The company uses the effective-interest method. Instructions: a) Prepare a complete amortization schedule for these bonds in good form. b) Prepare the journal entry needed to record the issuance...
On January 1, 2018, The Partial had bonds with a face value of $ 1,000,000, a...
On January 1, 2018, The Partial had bonds with a face value of $ 1,000,000, a coupon rate of 12% and an unpaid balance (book value) of $ 966,130. The contract specified a call price of $ 981,000. The bonds were previously issued with a market yield of 14% and interest is paid semi-annually, every June 30 and December 31. The company retired the bonds early on July 1, 2018. What is the book value of July 1, 2018? a)...
Richter Corporation sold $1,000,000 face value of bonds at 104 on January 1, 2014. These bonds...
Richter Corporation sold $1,000,000 face value of bonds at 104 on January 1, 2014. These bonds have a 7% stated rate and mature in 4 years. Interest is payable on June 30 and December 31 of each year. Prepare the journal entry at issuance on January 1, 2014. Prepare the journal entry to record the first interest payment on June 30, 2014. Calculate the carrying value of the bond on Dec. 31, 2014, after the first two interest payments. Prepare...
On January 1, 2019, The company you work for sold 6% bonds having a maturity value...
On January 1, 2019, The company you work for sold 6% bonds having a maturity value of $1,000,000 and a 3% yield (market rate). The bonds are dated January 1, 2019, and mature January 1, 2024, with interest payable June 30 and December 31 of each year. Your company allocates interest and unamortized discount or premium on the effective-interest basis. You are trying to explain the cash flow, interest and liability impacts of the bond issue to your CEO on...
Bonds with a face value of $1,000,000 are sold at 98. What is the journal entry...
Bonds with a face value of $1,000,000 are sold at 98. What is the journal entry to record the sale of the bonds? Cash                                                         1,000,000             Gain on Sale of Bonds                                             20,000             Bonds Payable                                                        980,000 Cash                                                             980,000 Loss on Sale of Bonds                                 20,000             Bonds Payable                                                     1,000,000 Cash                                                             980,000             Bonds Payable                                                        980,000 Cash                                                          1,000,000             Bonds Payable                                                      1,000,000 A corporation has Bonds Payable with a face value of $1,000,000 and an amortized cost ( carrying value ) of...
On May 1, 2019, Concord Corporation issued $660,000, 7%, 5-year bonds at face value. The bonds...
On May 1, 2019, Concord Corporation issued $660,000, 7%, 5-year bonds at face value. The bonds were dated May 1, 2019, and pay interest annually on May 1. Financial statements are prepared annually on December 31. Prepare the journal entry to record the issuance of the bonds. Prepare the adjusting entry to record the accrual of interest on December 31, 2019. Show the balance sheet presentation on December 31, 2019. Prepare the journal entry to record payment of interest on...
On January 1, 2019, ABC Company issued bonds with a face value of $1,000 and a...
On January 1, 2019, ABC Company issued bonds with a face value of $1,000 and a coupon rate of 8 percent. The bonds mature in 2 years and pay interest on June 30 and December 31 each year. The market rate is 12% annually. The present value of $1 table and the present value of annuity of $1 table are provided on the next page. Round your final answers to the nearest whole dollar. (1) What is the issue price...
Question: Bonds Payable On January 1, 2019, ABC Company issued bonds with a face value of...
Question: Bonds Payable On January 1, 2019, ABC Company issued bonds with a face value of $1,000 and a coupon rate of 8 percent. The bonds mature in 2 years and pay interest on June 30 and December 31 each year. The market rate is 12% annually. The present value of $1 table and the present value of annuity of $1 table are provided on the next page.Round your final answers to the nearest whole dollar. (1) What is the...
January 1, 2019 ABEF company issued 5-year bonds with a par value of $1,000,000 and a...
January 1, 2019 ABEF company issued 5-year bonds with a par value of $1,000,000 and a 6% annual stated rate of interest. The issue price of the bond was $950,000. Interest payments are made semiannually. Any premiums or discounts should amortized using the straight line method. (Remember when amortizing pay attention to how many periods) Prepare Journal Entries for the following A) Record the issuance of the bonds B) Record interest expense at June 30, 2019 C) Record interest expense...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT