Question

Myriad Solutions, Inc., issued 10% bonds, dated January 1, with a face amount of $320 million...

Myriad Solutions, Inc., issued 10% bonds, dated January 1, with a face amount of $320 million on January 1, 2018, for $283,294,720. The bonds mature on December 31, 2027 (10 years). For bonds of similar risk and maturity the market yield is 12%. Interest is paid semiannually on June 30 and December 31.

Indicate the amounts reported on the financial statements below for the year ending December 31, 2018.

Balance Sheet:

Net Liability _______

Income Statement:

Interest Expense _________

Statement of Cash Flows:

Operating ________

Investing ________

Financing ________

Homework Answers

Answer #1

Solution:

Effective Interest Amortizatiin Table
Semiannual period-End Cash interest paid Bond Interest expense Discount amortization Unamortized Discount Carrying value
01-01-2018 36705280 283294720
6/30/2018 $1,60,00,000 $1,69,97,683 997683 35707597 284292403
12/31/2018 $1,60,00,000 $1,70,57,544 1057544 34650053 285349947
Balance Sheet:
Net Liability 285349947 Carrying value
Income Statement:
Interest Expense $3,40,55,227 Total Interest expense for year 2018
Statement of Cash Flows:
Operating -$3,20,00,000 Total Cash paid for Interest
Investing 0
Financing 283294720 Issue price of bonds
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Myriad Solutions, Inc., issued 12% bonds, dated January 1, with a face amount of $330 million...
Myriad Solutions, Inc., issued 12% bonds, dated January 1, with a face amount of $330 million on January 1, 2018, for $295,039,998. The bonds mature on December 31, 2027 (10 years). For bonds of similar risk and maturity the market yield is 14%. Interest is paid semiannually on June 30 and December 31. Required: Complete the table below to calculate the amounts related to the bonds that Myriad would report in its financial statements. Indicate the amounts reported on the...
Federal Semiconductors issued 10% bonds, dated January 1, with a face amount of $870 million on...
Federal Semiconductors issued 10% bonds, dated January 1, with a face amount of $870 million on January 1, 2018. The bonds sold for $800,199,358 and mature on December 31, 2037 (20 years). For bonds of similar risk and maturity the market yield was 11%. Interest is paid semiannually on June 30 and December 31. Federal determines interest at the effective rate. Federal elected the option to report these bonds at their fair value. On December 31, 2018, the fair value...
Universal Foods issued 10% bonds, dated January 1, with a face amount of $154 million on...
Universal Foods issued 10% bonds, dated January 1, with a face amount of $154 million on January 1, 2021 to Wang Communications. The bonds mature on December 31, 2035 (15 years). The market rate of interest for similar issues was 12%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare...
International Foods issued 10% bonds, dated January 1, with a face amount of $140 million on...
International Foods issued 10% bonds, dated January 1, with a face amount of $140 million on January 1, year 1. The bonds mature on December 31, after 15 years. The market rate of interest for similar issues was 12%. Interest is paid semiannually on June 30 and December 31. International uses the straight-line method. Required: 1. Determine the price of the bonds at January 1, year 1. 2. Prepare the journal entry to record their issuance by International Foods on...
On January 1, 2018, Bishop Company issued 8% bonds dated January 1, 2018, with a face...
On January 1, 2018, Bishop Company issued 8% bonds dated January 1, 2018, with a face amount of $21.0 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your intermediate calculations to...
Federal Semiconductors issued 11% bonds, dated January 1, with a face amount of $880 million on...
Federal Semiconductors issued 11% bonds, dated January 1, with a face amount of $880 million on January 1, 2018. The bonds sold for $813,796,294 and mature on December 31, 2037 (20 years). For bonds of similar risk and maturity the market yield was 12%. Interest is paid semiannually on June 30 and December 31. Federal determines interest at the effective rate. Federal elected the option to report these bonds at their fair value. On December 31, 2018, the fair value...
On January 1, 2018, Shirley Corporation purchased 10% bonds dated January 1, 2018, with a face...
On January 1, 2018, Shirley Corporation purchased 10% bonds dated January 1, 2018, with a face amount of $13 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Determine the price of...
On January 1, 2018, for $18.1 million, Marker Company issued 10% bonds, dated January 1, 2018,...
On January 1, 2018, for $18.1 million, Marker Company issued 10% bonds, dated January 1, 2018, with a face amount of $20.1 million. For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. Required: 1. Prepare the journal entry to record interest on June 30, 2018, using the effective interest method. 2. Prepare the journal entry to record interest on December 31, 2018, using the effective interest method.
issued 11% bonds, dated January 1, with a face amount of $800,000 on January 1, 2009....
issued 11% bonds, dated January 1, with a face amount of $800,000 on January 1, 2009. The bonds sold for $739,815 and mature in 2028 (20 years). For bonds of similar risk and maturity, the market yield was 12%. Interest is paid semiannually on June 30 and December 31. The company uses the effective interest method of amortization and has a calendar year end.   Instructions: Prepare the journal entries that Federal Semiconductors would make on January 1, June 30, December...
The Bradford Company issued 12% bonds, dated January 1, with a face amount of $96 million...
The Bradford Company issued 12% bonds, dated January 1, with a face amount of $96 million on January 1, 2021. The bonds mature on December 31, 2030 (10 years). For bonds of similar risk and maturity, the market yield is 14%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT