Question

Hello, Please explain the steps of the solution thoroughly. Thank you in advance for your time!...

Hello,

Please explain the steps of the solution thoroughly. Thank you in advance for your time!

Bond contract rate = 7% semi-annual

Bond par                 = $10,000

Bond market rate   = 6% semi-annual

Bond life                   = 10 years

  1. Find the selling price of this bond
  2. Will it be sold at a discount or premium?
  3. Do the journal entry for the issuance
  4. Calculate the discount/premium amortization per period (use the straight-line method)
  5. Do the entry for the payment of cash interest per period
  6. Do the entry for the amortization of the discount/premium per period    
  7. Find total interest expense per period
  8. Show the balance sheet presentation of the bond after two periods have elapsed
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

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
Please answer all the questions in detail. All of them need to be answered fully, not...
Please answer all the questions in detail. All of them need to be answered fully, not partially. Thank you for your help. I appreciate it! Problem:                                  Bond contract rate = 7% semi-annual Bond par                 = $10,000 Bond market rate   = 6% semi-annual Bond life                   = 10 years Find the selling price of this bond Will it be sold at a discount or premium? Do the journal entry for the issuance Calculate the discount/premium amortization per period (use the straight-line method) Do the entry...
Hello, Can you please answer this question with showing work. A four-year bond has an 8%...
Hello, Can you please answer this question with showing work. A four-year bond has an 8% coupon rate and a face value of $1,000. If the current price of the bond is $870.51, calculate the yield to maturity of the bond (assume annual interest payments). Also, indicate whether the bond is a discount bond or a premium bond or a par bond. Thanks
Tano issues bonds with a par value of $91,000 on January 1, 2017. The bonds’ annual...
Tano issues bonds with a par value of $91,000 on January 1, 2017. The bonds’ annual contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 12%, and the bonds are sold for $84,291. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over the...
Exercise 10-4 Straight-Line: Amortization of bond discount LO P2 Tano Company issues bonds with a par...
Exercise 10-4 Straight-Line: Amortization of bond discount LO P2 Tano Company issues bonds with a par value of $87,000 on January 1, 2019. The bonds’ annual contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $80,375. 1. What is the amount of the discount on these bonds at issuance? 2. How...
Quatro Co. issues bonds dated January 1, 2018, with a par value of $730,000. The bonds’...
Quatro Co. issues bonds dated January 1, 2018, with a par value of $730,000. The bonds’ annual contract rate is 12%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $767,042. 1. What is the amount of the premium on these bonds at issuance? 2. How much total bond interest expense will be recognized over...
Ten Year, 6% Bonds with a $4,000,000 par value , were issued at a time when...
Ten Year, 6% Bonds with a $4,000,000 par value , were issued at a time when the market rate of interest was 8%. The Discount /Premium on these Bonds is amortized semi -annually each interest period. Given these facts, which of the following statements would be true? a. The amount of unamortized premium decreases from its balance at issuance date and the carrying value of the Bond increases. b. The amount of unamortized discount decreases from its balance at issuance...
bond premium ordiscount using the way of the straight line amorizatioon A company issues 2,000,000 dollars...
bond premium ordiscount using the way of the straight line amorizatioon A company issues 2,000,000 dollars of eight percent, four-year bonds that is started in 1/1, in the year of "two thousand and seventeen". giving out the interest semi-annually on 6/30 and 12/31. Bonds are issued and having the price, $1,950,000 a. Prepare the 1/1, two thousand and seventeen journal entry to have the issuance of bond. b. For every semi-annual time, make; (1) the payment of cash,(2) the discount...
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 December​ 31,2020​,Mobbs Corp. issues 11 ​percent, 10-year convertible bonds with a maturity value of $5,500,000....
On December​ 31,2020​,Mobbs Corp. issues 11 ​percent, 10-year convertible bonds with a maturity value of $5,500,000. The​ semi-annual interest dates are June 30 and December 31. The market interest rate is 12 ​percent, and the issue price of the bonds is 93.5636364. Mobbs Corp. amortizes bond premium and discount by the​ effective-interest method.Required Requirement 1. Prepare an​ effective-interest method amortization table for the first four​ semi-annual interest periods. ​(Round your answers to the nearest​ dollar.) Mobbs Corp. Amortization Table A...
Tano issues bonds with a par value of $180,000 on January 1, 2017. The bonds’ annual...
Tano issues bonds with a par value of $180,000 on January 1, 2017. The bonds’ annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $170,862. What is the amount of the discount on these bonds at issuance? How much total bond interest expense will be recognized over the life of...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT