Question

On March 1, The Red company Inc issued a $600,000, 8%, 3years bond. Interest is payable...


On March 1, The Red company Inc issued a $600,000, 8%, 3years bond.

Interest is payable semi annu beginning Sep1, 2017.

Year end is Apr 30, 2017

Question#1
Using tge effective interest rate method, make an amortization schedule

(assume that market interest rate is 8.5% on the date of issue)

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Hi

Let me know in case you face any issue: Although the format of schedule is not provided but i have used the best format:

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
On January 1, 2017, Powell Corporation issued $600,000, 5%, 5-year bonds dated January 1, 2017, at...
On January 1, 2017, Powell Corporation issued $600,000, 5%, 5-year bonds dated January 1, 2017, at 95. The bonds pay annual interest on January 1. The company uses the effective interest method of amortization and has a calendar year end. The market interest rate is 6%. Prepare all the journal entries that Powell Corporation would make related to this bond issue through January 1, 2018. Be sure to indicate the date on which the entries would be made. January 1,...
On January 1, 2020, Larkspur Inc. issued $580,000 of 4-year, 4% bonds to yield a market...
On January 1, 2020, Larkspur Inc. issued $580,000 of 4-year, 4% bonds to yield a market interest rate of 5%. Interest is paid every quarter on January 1, April 1, July 1, and October 1. Larkspur has a calendar year end. Prepare a bond amortization schedule for the first two years (8 interest periods). (Round answers to 0 decimal places, e.g. 5,276.) LARKSPUR INC. Bond Discount Amortization Schedule Effective-Interest Method Semi-Annual Interest Period Interest Payment Interest Expense Amortization Bond Amortized...
On January 1, 2016, Tonika Company issued a six-year, $10,000, 10% bond. The interest is payable...
On January 1, 2016, Tonika Company issued a six-year, $10,000, 10% bond. The interest is payable annually each December 31. The issue price was $9,577 based on an 11% effective interest rate. Tonika uses the effective-interest amortization method. The book value of the bonds as of December 31, 2016 is closest to: rev: 10_08_2016_QC_CS-64487 $9,524. $9,630. $53. $8,577.
Capital Company issued $600,000, 10%, 20-year bonds on January 1, 2014, at 103. Interest is payable...
Capital Company issued $600,000, 10%, 20-year bonds on January 1, 2014, at 103. Interest is payable semiannually on July 1 and January 1. Capital uses the straight-line method of amortization and has a calendar year end. Instructions Prepare all (3) journal entries made in 2014 related to the bond issue. PLEASE show the journal entry for payment of interest
Vaughn Ltd. issued a $135,000, 3-year, zero-interest bond dated January 1, 2017. The market interest rate...
Vaughn Ltd. issued a $135,000, 3-year, zero-interest bond dated January 1, 2017. The market interest rate for similar bonds was 8.25%. Assume the company used the effective interest method of amortization. 1. Prepare the journal entry for the issue of the bond. 2. Prepare a schedule of bond discount/premium amortization. (Round answers to 0 decimal places) 3. Prepare the journal entry at December 31, 2017, assuming the company’s year-end was December 31.
On January 1, 2019, Tonika Company issued a six-year, $10,000, 6% bond. The interest is payable...
On January 1, 2019, Tonika Company issued a six-year, $10,000, 6% bond. The interest is payable annually each December 31. The issue price was $9,523 based on an 7% effective interest rate. Tonika uses the effective-interest amortization method. The December 31, 2020 book value after the December 31, 2020 interest payment was made is closest to: A) $9590 B) $9519 C) $9523 D) $9661
Veltman Corp issued $400,000 8% 10 year bonds payable at 1.15 on May 31, 2017. Market...
Veltman Corp issued $400,000 8% 10 year bonds payable at 1.15 on May 31, 2017. Market rate on the date of issuance was 6% interest is paid semiannually on November 30 and May 31. REQUIRED: Make the journal entry to record the issuance Make the journal entry to record the first interest payment and amortization of bond premium/discount using the effective interest method. Present the beginning balance and information for the first two interest payments on the bond amortization table...
Effective Interest Amortization On January 1, Eagle, Inc., issued $950,000 of 9%, 20-year bonds for $1,016,500...
Effective Interest Amortization On January 1, Eagle, Inc., issued $950,000 of 9%, 20-year bonds for $1,016,500 yielding an effective interest rate of 8%. Semiannual interest is payable on June 30 and December 31 each year. The firm uses the effective interest method to amortize the premium. Required a. Prepare an amortization schedule showing the necessary information for the first two interest periods. Round amounts to the nearest dollar. b. Prepare the journal entry for the bond issuance on January 1....
On January 1, 2016, Parker Company issued a three-year, $100,000, 5% bond. The interest is payable...
On January 1, 2016, Parker Company issued a three-year, $100,000, 5% bond. The interest is payable annually each December 31. The market rate of interest for companies similar to Parker is 6%. Parker uses the effective-interest amortization method. The issue price of the bond on January 1, 2016 is closest to: A. $97,327 B. $92,639. C. $102,723. D. $97,567. Based on the same information provided above, Parker’s interest expense for December 31, 2016 is closest to: -$5,839. -$5,257. -$5,887. -$5,000.
Bonds Payable Journal Entries; Effective Interest Amortization On December 31, 2009, Kay Company issued $600,000 of...
Bonds Payable Journal Entries; Effective Interest Amortization On December 31, 2009, Kay Company issued $600,000 of five-year, 13% bonds payable for $650,798 yielding an effective interest rate of 10%. Interest is payable semiannually on June 30 and December 31. Prepare journal entries to reflect (a) the issuance of the bonds, (b) the semiannual interest payment and premium amortization (effective interest method) on June 30, 2010, and (c) the semiannual interest payment and premium amortization on December 31, 2010. Round amounts...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT