B8 Required information.E10-14 (Algo) (Supplement 10A) Recording the Effects of a Discount Bond Issue and First InterestPayment and Preparing a Discount Amortization Schedule (Straight-Line Amortization) [LO 10-S1)[The following information applies to the questions displayed below]On January 1, when the market interest rate was 8 percent, Seton Corporation completed a $160,000, 6 percent bondissue for $138,529. The bonds pay interest each December 31 and mature in 10 years. Seton amortizes the bond discountusing the straight-line methodE10-14 (Algo) Part 33. Prepare a bond discount amortization schedule for these bonds. (Do not round intermediate calculations. Round your answers tothe nearest dollar.)Changes During the PeriodDiscountAmortizedPeriod Ended Cash PaidStartYear 1 EndYear 2 EndYear 3 EndYear 4 EndYear 5 EndYear 6 EndYear 7 EndYear 8 EndYear 9 EndYear 10 EndInterestExpenseEnding Bond Liability BalancesDiscount onBonds Payable Carrying ValueBonds Payable0000000000

The principle amount, also referred to as the face value, and the interest due on an amortized bond…

Answered: Required information. E10-14 (Algo)…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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! Required information P10-10 (Algo) Preparing a Bond Amortization Schedule for a Bond Issued at a Premium LO10-5 [The following information applies to the questions displayed below.] On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective-interest amortization method. The partially completed amortization schedule below pertains to the bonds: 1/1/20x1 12/31/20x1 12/31/20x2 12/31/20x3 12/31/20x4 Date P10-10 Part 1 Date 1/1/20x1 12/31/20x1 12/31/20x2 12/31/20x3 12/31/20x4 $ Cash $ 1,792 ? ? ? Required: 1. Complete the amortization schedule. Note: Enter all your values in positive. Round your final answers to nearest whole dollar amount. Cash 1,792 $ $ Interest $ 1,661 ? ? 1,640 Interest 1,661 $ 1,640 Amortization $ 131 ? 145 ? Amortization $ $ 131 $ $ 145 $ Balance 32,566 32,435 32,297 Balance $ 32,566 32,435 32,297 ? 32,000 32,000
Required Information P10-10 (Algo) Preparing a Bond Amortization Schedule for a Bond Issued at a Premium LO10-5 [The following information applies to the questions displayed below.] On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective-interest amortization method. The partially completed amortization schedule below pertains to the bonds: Interest $ 1,661 ? ? 1,640 Date January 1, Year 1 End of Year 1 End of Year 2 End of Year 3 End of Year 4 -10-10 Part 3 Cash $ 1,792 ? ? Cash received ? Amortization $ 131 ? 145 ? Balance 32,566 32,435 32,297 ? 32,000 $ . How much cash was received on the day the bonds were issued (sold)?
Required Information P10-10 (Algo) Preparing a Bond Amortization Schedule for a Bond Issued at a Premium LO10-5 [The following information applies to the questions displayed below.] On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective-interest amortization method. The partially completed amortization schedule below pertains to the bonds: Interest $ 1,661 ? ? 1,640 Date January 1, Year 1 End of Year 1 End of Year 2 End of Year 3 End of Year 4 P10-10 Part 8 Year 2 Year 3 Cash $ 1,792 ? ? ? Amortization $ 131 ? 145 ? 8. What amount of interest expense will be reported on the income statement for Year 2 and Year 3? (Round your final answers to nearest whole dollar amount.) Interest Expense Balance $ 32,566 32,435 32,297 ? 32,000
E10-15 (Algo) Part 1 and 2 On January 1, when the market interest rate was 8 percent, Seton Corporation completed a $160,000, 7 percent bond issue for $149,265. The bonds pay interest each December 31 and mature in 10 years. Assume Seton Corporation uses the effective-interest method to amortize the bond discount. Required: 1. & 2. Prepare the required journal entries to record the bond issuance and the first interest payment on December 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Round your answers to the nearest whole dollar.) No 1 2 Date January 01 December 31 General Journal, Cash Discount on Bonds Payable Bonds Payable Interest Expense Discount on Bonds Payable Cash 0 0 0 000 Debit 149,265 10,735 5,971 Credit 160,000 5,600 371
ES PA10-6 (Algo) (Supplement 10A) Recording Bond Issue, Interest Payments (Straight-Line Amortization), and Early Bond Retirement [LO 10-S1] On January 1, 2021, Loop Raceway issued 630 bonds, each with a face value of $1,000, a stated interest rate of 5 percent paid annually on December 31, and a maturity date of December 31, 2023. On the issue date, the market interest rate was 6 percent, so the total proceeds from the bond issue were $613,148. Loop uses the straight-line bond amortization method and adjusts for any rounding errors when recording interest in the final year. Required: 1. Prepare a bond amortization schedule. 2-5. Prepare the journal entries to record the bond issue, the interest payments on December 31, 2021 and 2022, the interest and face value payment on December 31, 2023 and the bond retirement. Assume the bonds are retired early on January 1, 2023 instead of at their maturity date of 12/31/2023, record the entry to retire the bonds early assuming a price of 98.…
Effective Interest MethodE9B. On March 1, 2014, Munsey Corporation issued $1,200,000 of 6 percent, fiveyear bonds. The semiannual interest payment dates are February 28 and August 31.Because the market rate for similar investments was 7 percent, the bonds had to beissued at a discount. The discount on the issuance of the bonds was $49,900. The company’s fiscal year ends February 28. Prepare the journal entries to record the bondissue on March 1, 2014, the payment of interest, and the amortization of the discounton August 31, 2014 and on February 28, 2015. Use the effective interest method.(Round to the nearest dollar.)
Q)1 A). On September 1, Deutsch Limited issues 8%, 5-year bonds payable with a maturity value of OR 20,000. The bonds sell at 98 and pay interest on March 1 and September Deutsch amortize bond discount by the straight-line method. Required: Journalize the issuance of the bonds on September 1, and the semiannual interest payment on March 1 and September 1. B). What are the two categories of liabilities reported on the balance sheet? Provide example of each.
(E7-39) Bonds Payable: On January 1, 20X7 – Arbor Corporation issued $800,000 of 20-year, 11% bonds for $739,814.81, yielding a market (yield) rate of 12%. Interest is payable semiannually on June 30th and December 31. Confirm the bond issue price. Indicate the financial statement effects using the template for (1) bond issuance, (2) semiannual interest payable and discount amortization on June 30, 20X7, and (3) semiannual interest payment and discount amortization on December 31, 20X7.
As a long-term investment, Camex Inc. paid $800,000 (par value) for Simple Bank bonds. The bonds pay 5.5% interest semiannually on September 1 and March 1. Prepare the journal entries for the following transactions. Round all values to the nearest dollar. Purchase on September 1, 2020. Year-end adjusting entry, December 31, 2020. Receipt of semiannual interest payment March 1, 2021. Redemption of the bonds at maturity.
Mahalo Boat Adventure Inc. has a July 31 year-end. It showed the following partial amortization schedules regarding two bond issues: "Pic" a. Were the bond B issued at a premium and/or discount? - Discount b. Journalize the issuance of bond B on April 1, 2021. c. What is the contract interest rate for the issue bond B? - 8% d. Interest of how much is paid how often for bond B issued? - 10,800 Quarterly e. What is the term of bond B issue? f. Show how bond B would appear on the balance sheet under non-current liabilities at July 31, 2029. g. Calculate the bond B interest expense that would appear on the income statement for the year ended July 31, 2030. h. Independent of (a) through (g), assume that bond B issues was retired on December 1, 2030, at 97. Record the entries. - Record the interest paid on bonds. - Record the retired bonds.
PA5. 13.3 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
The following situations are independent of each other. Instructions For situation (a) and situation (b), prepare the entry to "redeem" the bonds. a) MCo. redeemed $140,000 face value, 9% bonds on April 30, 2022, at 101. The carrying value of the bonds at the redemption date was $126,500. The bonds pay annual interest, and the interest payment due on April 30, 2022, has been made and recorded. To create the journal entry: (1) Bonds are "redeemed" at face value (DR "Bonds R"). (2) calculate CASH paid out to redeem bonds (a $1,000 bond redeemed at 102 means cash paid out (a CR) of $1,020). (3) calculate "premium" or "discount" on bonds payable by (face value - carrying value). If carrying value LESS THAN face value = a "discount" (CR "discount on..."). If carrying value GREATER THAN face value = a "premium" (DR "premium on..."). (4) Calculate gain or loss on redemption by plugging in DR $ ("loss...") or CR $ ("gain...") so that total $ DR = total $ CR. Situation (a) journal entry (Read…

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