On June 30, 2021, Moran Corporation issued $12.0 million of its 8% bonds for $10.8 million....

On June 30, 2021, Moran Corporation issued $12.0 million of its 8% bonds for $10.8 million. The bonds were priced to yield 10%. The bonds are dated June 30, 2021. Interest is payable semiannually on December 31 and July 1. If the effective interest method is used, by how much should the bond discount be reduced for the six months ended December 31, 2021?

Expert Solution

ekkarill92 answered 2 years ago

On June 30, 2021, Moran Corporation issued $4 million of its 8% bonds for $3.5 million....

On June 30, 2021, Moran Corporation issued $4 million of its 8% bonds for $3.5 million. The bonds were priced to yield 9.4%. The bonds are dated June 30, 2021. Interest is payable semiannually on December 31 and July 1. If the effective interest method is used, by how much should the bond discount be reduced for the six months ended December 31, 2021? Multiple Choice $3,500. $4,500. $4,800. $9,000.

On June 30, 2021, L. N. Bean issued $11 million of its 8% bonds for $10...

On June 30, 2021, L. N. Bean issued $11 million of its 8% bonds for $10 million. The bonds were priced to yield 10%. Interest is payable semiannually on December 31 and July 1. If the effective interest method is used, how much bond interest expense should the company report for the 6 months ended December 31, 2021? Multiple Choice $460,000 $550,000 $440,000 $500,000

On January 1, 2021, Rapid Airlines issued $300 million of its 8% bonds for $276 million....

On January 1, 2021, Rapid Airlines issued $300 million of its 8% bonds for $276 million. The bonds were priced to yield 10%. Interest is payable semiannually on June 30 and December 31. Rapid Airlines records interest at the effective rate and elected the option to report these bonds at their fair value. On December 31, 2021, the fair value of the bonds was $290 million as determined by their market value in the over-the-counter market. Rapid determined that $1,000,000...

On January 1, 2021, Rapid Airlines issued $255 million of its 8% bonds for $235 million....

On January 1, 2021, Rapid Airlines issued $255 million of its 8% bonds for $235 million. The bonds were priced to yield 10%. Interest is payable semiannually on June 30 and December 31. Rapid Airlines records interest at the effective rate and elected the option to report these bonds at their fair value. On December 31, 2021, the fair value of the bonds was $244 million as determined by their market value in the over-the-counter market. Rapid determined that $1,000,000...

cupola fan corporation issued 10% 400,000, 10-year bonds for 385000 on June 30, 2021.

cupola fan corporation issued 10% 400,000, 10-year bonds for 385000 on June 30, 2021. The debt issue costs were 1500. interest is paid semiannually on December 31 and June 30. one year from the issue date (July 1, 2022). the corporation exercised its call privilege and retired the bonds for 395000. the corporation uses the straight-line method both to determine interest expense and to amortize debt issue costs.

The Gorman Group issued $890,000 of 9% bonds on June 30, 2021, for $978,079. The bonds...

The Gorman Group issued $890,000 of 9% bonds on June 30, 2021, for $978,079. The bonds were dated on June 30 and mature on June 30, 2041 (20 years). The market yield for bonds of similar risk and maturity is 8%. Interest is paid semiannually on December 31 and June 30. Required: Complete the below table to record the company's journal entry. 1. to 3. Prepare the journal entries to record their issuance by The Gorman Group on June 30,...

Cupola Fan Corporation issued 12%, $580,000, 10-year bonds for $552,000 on June 30, 2021. Debt issue...

Cupola Fan Corporation issued 12%, $580,000, 10-year bonds for $552,000 on June 30, 2021. Debt issue costs were $3,300. Interest is paid semiannually on December 31 and June 30. One year from the issue date (July 1, 2022), the corporation exercised its call privilege and retired the bonds for $560,000. The corporation uses the straight-line method both to determine interest expense and to amortize debt issue costs. Required: 1. to 4. Prepare the journal entry to record the issuance of...

Cupola Fan Corporation issued 12%, $460,000, 10-year bonds for $450,000 on June 30, 2021. Debt issue...

Cupola Fan Corporation issued 12%, $460,000, 10-year bonds for $450,000 on June 30, 2021. Debt issue costs were $2,100. Interest is paid semiannually on December 31 and June 30. One year from the issue date (July 1, 2022), the corporation exercised its call privilege and retired the bonds for $455,000. The corporation uses the straight-line method both to determine interest expense and to amortize debt issue costs. Required: 1. to 4. Prepare the journal entry to record the issuance of...

On June 30, 2021, Singleton Computers issued 7% stated rate bonds with a face amount of...

On June 30, 2021, Singleton Computers issued 7% stated rate bonds with a face amount of $200 million. The bonds mature on June 30, 2036 (15 years). The market rate of interest for similar bond issues was 4% (2.0% semiannual rate). Interest is paid semiannually (3.5%) on June 30 and December 31, beginning on December 31, 2021. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from...

On June 30, 2021, Singleton Computers issued 4% stated rate bonds with a face amount of...

On June 30, 2021, Singleton Computers issued 4% stated rate bonds with a face amount of $100 million. The bonds mature on June 30, 2036 (15 years). The market rate of interest for similar bond issues was 5% (2.5% semiannual rate). Interest is paid semiannually (2.0%) on June 30 and December 31, beginning on December 31, 2021. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from...

Question