College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Chapter 22, Problem 13SPB
(a)
To determine
Journalize the entry for the issuance of bonds in the books of C Entertainment.
(b)
To determine
Record the journal entry for the initial deposit to the bond sinking fund.
(c)
To determine
Journalize the entry for the semiannual interest payment in the books of C Entertainment.
(d)
To determine
Record the journal entry for the first year’s sinking fund earnings.
(e)
To determine
Journalize the entry for the year-end adjustment in the books of C Entertainment.
(f)
To determine
Journalize the entry to reverse the year-end adjustment in the books of C Entertainment.
(g)
To determine
Journalize the entry for the semiannual interest payment in the books of C Entertainment.
(h)
To determine
Record the journal entry for the deposit to bond sinking fund.
(i)
To determine
Record the journal entry for the redemption of the bonds.
(j)
To determine
Record the journal entry for the return of excess cash in the sinking fund to the corporation.
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1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.
2a. Journalize the entry to record the first semiannual interest payment on December 31, 20Y1, and the amortization of the bond premium, using the straight-line method.Compute the price of $42,601,480 received for the bonds by using the present value tables
On January 1, 2024, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below:
Payment
Cash Payment
Effective Interest
Increase in Balance
Outstanding Balance
6,627,273
1
320,000
331,364
11,364
6,638,637
2
320,000
331,932
11,932
6,650,569
3
320,000
332,528
12,528
6,663,097
4
320,000
333,155
13,155
6,676,252
5
320,000
333,813
13,813
6,690,065
6
320,000
334,503
14,503
6,704,568
~
~
~
~
~
~
~
~
~
~
~
~
~
~
~
38
320,000
389,107
69,107
7,851,247
39
320,000
392,562
72,562
7,923,809
40
320,000
396,191
76,191
8,000,000
Required:
What is the face amount of the bonds?
What is the initial selling price of the bonds?
What is the term to maturity in years?
Interest is determined by what approach?
What is the stated annual interest rate?
What is the effective annual interest rate?
What is the total cash interest paid over the term to maturity?…
On January 1, 2024, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below:
Payment
Cash Payment
Effective Interest
Increase in Balance
Outstanding Balance
6,286,574
1
370,000
377,194
7,194
6,293,768
2
370,000
377,626
7,626
6,301,394
3
370,000
378,084
8,084
6,309,478
4
370,000
378,569
8,569
6,318,047
5
370,000
379,083
9,083
6,327,130
6
370,000
379,628
9,628
6,336,758
~
~
~
~
~
~
~
~
~
~
~
~
~
~
~
38
370,000
432,132
62,132
7,264,327
39
370,000
435,860
65,860
7,330,187
40
370,000
439,813
69,813
7,400,000
Required:
What is the face amount of the bonds?
What is the initial selling price of the bonds? answer = $6,286,574
What is the term to maturity in years? answer = 20 years
Interest is determined by what approach? answer = Effective interest rate
What is the stated annual interest rate?
What is the effective annual interest…
Chapter 22 Solutions
College Accounting, Chapters 1-27
Ch. 22 - A secured bond is one that is backed by specific...Ch. 22 - Prob. 2TFCh. 22 - When bonds are issued at face value, the debit to...Ch. 22 - Prob. 4TFCh. 22 - Prob. 5TFCh. 22 - Bonds that give the holder the option of...Ch. 22 - Prob. 2MCCh. 22 - Prob. 3MCCh. 22 - Prob. 4MCCh. 22 - Bond sinking fund earnings are (a) subtracted from...
Ch. 22 - Prob. 1CECh. 22 - Prob. 2CECh. 22 - Prob. 3CECh. 22 - Prob. 4CECh. 22 - Prob. 5CECh. 22 - Prob. 1RQCh. 22 - Prob. 2RQCh. 22 - Prob. 3RQCh. 22 - Prob. 4RQCh. 22 - What accounts are affected when bonds are issued...Ch. 22 - Prob. 6RQCh. 22 - Prob. 7RQCh. 22 - Prob. 8RQCh. 22 - Prob. 9RQCh. 22 - When bonds are redeemed before maturity, how is...Ch. 22 - Prob. 11RQCh. 22 - How should sinking fund earnings be reported on...Ch. 22 - Prob. 13RQCh. 22 - Prob. 1SEACh. 22 - Prob. 2SEACh. 22 - Prob. 3SEACh. 22 - REDEMPTION OF BONDS ISSUED AT FACE VALUE Levesque...Ch. 22 - REDEMPTION OF BONDS ISSUED AT A PREMIUM Brighton...Ch. 22 - REDEMPTION OF BONDS ISSUED AT A DISCOUNT...Ch. 22 - BOND SINKING FUNDS M. J. Adams Corporation pays...Ch. 22 - BONDS ISSUED AT FACE VALUE Ito Co. issued the...Ch. 22 - Prob. 9SPACh. 22 - Prob. 10SPACh. 22 - Prob. 11SPACh. 22 - Prob. 12SPACh. 22 - Prob. 13SPACh. 22 - Prob. 1SEBCh. 22 - Prob. 2SEBCh. 22 - Prob. 3SEBCh. 22 - Prob. 4SEBCh. 22 - Prob. 5SEBCh. 22 - REDEMPTION OF BONDS ISSUED AT A DISCOUNT Medina...Ch. 22 - Prob. 7SEBCh. 22 - BONDS ISSUED AT FACE VALUE Ramona Arroyo Co....Ch. 22 - Prob. 9SPBCh. 22 - Prob. 10SPBCh. 22 - Prob. 11SPBCh. 22 - BONDS ISSUED AT A DISCOUNT, REDEEMED AT A GAIN...Ch. 22 - Prob. 13SPBCh. 22 - MANAGING YOUR WRITING The business where you work...Ch. 22 - Prob. 1ECCh. 22 - MASTERY PROBLEM Jackson, Inc.s fiscal year ends...Ch. 22 - CHALLENGE PROBLEM This problem challenges you to...
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