Attempt History Current Attempt in Progress On January 1, 2024, Cullumber Ltd, issued bonds with a maturity value of $7.80 million when the market rate of interest was 4%. The bonds have a coupon (contractual) interest rate of 5% and mature on January 1, 2034. Interest on the bonds is payable semi-annually on July 1 and January 1 of each year. The company's year end is December 31. Click here to view the factor table. Present Value of 1. Click here to view the factor table. Present Value of an Annuity of 1 (a) x Your answer is incorrect. Calculate the issue price of the bonds. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answer to 0 decimal places, e.g. 5,275.) Issue price $ 8458203

Attempt History Current Attempt in Progress On January 1, 2024, Cullumber Ltd, issued bonds with a maturity value of $7.80 million when the market rate of interest was 4%. The bonds have a coupon (contractual) interest rate of 5% and mature on January 1, 2034. Interest on the bonds is payable semi-annually on July 1 and January 1 of each year. The company's year end is December 31. Click here to view the factor table. Present Value of 1. Click here to view the factor table. Present Value of an Annuity of 1 (a) x Your answer is incorrect. Calculate the issue price of the bonds. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answer to 0 decimal places, e.g. 5,275.) Issue price $ 8458203

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 76E

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Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market rate of 4%. The bonds paid interest semi-annually on June 30 and Dec. 31. How much money did the company receive when the bonds were issued? The bonds would be quoted at what rate?
Aggies Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018, and received $540,000. Interest is payable semi-annually. The premium is amortized using the straight-line method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. Dec. 31, 2018: entry to record payment of interest to bondholders C. Dec. 31, 2018: entry to record amortization of premium
On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?
On July 1, a company sells 8-year $250,000 bonds with a stated interest rate of 6%. If interest payments are paid annually, each interest payment will be ________. A. $120,000 B. $60,000 C. $7,500 D. $15,000
On January 1, a company issued a 5-year $100,000 bond at 6%. Interest payments on the bond of $6,000 are to be made annually. If the company received proceeds of $112,300, how would the bonds issuance be quoted? A. 1.123 B. 112.30 C. 0.890 D. 89.05
Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $540,000. Interest is payable annually. The premium is amortized using the straightline method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. June 30, 2019: entry to record payment of interest to bondholders C. June 30, 2019: entry to record amortization of premium D. June 30, 2020: entry to record payment of interest to bondholders E. June 30, 2020: entry to record amortization of premium
Brief ExerciseBonds Issued at a Premium (Effective Interest) Refer to the information above for Haley Industries. Required: Prepare the journal entry for December 31, 2022 and 2023. Use the following information for Brief Exercises 9-55 and 9-58: Haley Industries issued $120,000 of 11% , 7-year bonds on January 1, 2020, with $5,842 pre- mium. Interest is paid annually on December 31. The market rate of interest is 10%.
Current Attempt in Progress Martinez Ltd. issued a $890,000, 10-year bond at par on January 1, 2023. The bond paid 10% interest each January 1 and July 1. The company's year end was December 31. Prepare the journal entries to record the issue of the bond, the payment of interest on July 1, and the December 31 accrual entry. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles Debit Credit
Current Attempt in Progress Pharoah Company issued $309.000, 9%, 15-year bonds on December 31, 2024, for $296,640. Interest is payable annually on December 31. Pharoah uses the straight-line method to amortize bond premium or discount. Prepare the journal entries to record the following events. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) (a) (b) (c) No. (a) The issuance of the bonds: The payment of interest and the discount amortization on December 31, 2025. The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. Date Account Titles and Explanation Debit Cred
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A company has just issued (2024 1st Jan) a $100000 ten-year bond. The bonds pay 10% per annum. Coupons are paid every 31st December of each year. The yield to maturity at issue was 9%. The company uses the effective interest rate to amortize any discounts or premiums on bonds. Identify which accounts should reflect the events that take place this first year(2024) and the amounts for all 3 financial statements ( balance sheet, Income statement, statement of cashflows)