Question

On January 1, 2017, JWS Corporation issued $600,000 of 7% bonds, due in 10 years. The...

On January 1, 2017, JWS Corporation issued $600,000 of 7% bonds, due in 10 years. The bonds were issued for $644,636 and pay interest each July 1 and January 1. JWS uses the effective interest method. What is the carrying value of the bonds on July 1, 2017, assuming an 6% effective interest rate?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Carrying value of the bonds on January 1, 2017 644636
Less: Premium amortized on July 1, 2017 1661
Carrying value of the bonds on July 1, 2017 642975

Journal entries that would be recorded:

Date General Journal Debit Credit
Jan. 1, 2017 Cash 644636
Premium on bonds payable 44636
Bonds payable 600000
(Issuance of bonds)
Jul. 1, 2017 Interest expense ($644636 x 6% x 1/2) 19339
Premium on bonds payable 1661
Cash ($600000 x 7% x 1/2) 21000
(Payment of interest and amortization of premium)
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, 2020, JWS Corporation issued $600,000 of 7% bonds, due in 10 years. The...
On January 1, 2020, JWS Corporation issued $600,000 of 7% bonds, due in 10 years. The bonds were issued for $559,231, and pay interest each July 1 and January 1. JWS uses the effective-interest method. Prepare the company’s journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Assume an effective-interest rate of 8%. No. Date Account Titles and Explanation Debit Credit (a) (b) (c)
On January 1, 2017, Crane Corporation issued $630,000 of 9% bonds, due in 10 years. The...
On January 1, 2017, Crane Corporation issued $630,000 of 9% bonds, due in 10 years. The bonds were issued for $590,745, and pay interest each July 1 and January 1. Crane uses the effective-interest method. Prepare the company’s journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Assume an effective-interest rate of 10%.
Brief Exercise 14-7 On January 1, 2017, Sweet Corporation issued $480,000 of 7% bonds, due in...
Brief Exercise 14-7 On January 1, 2017, Sweet Corporation issued $480,000 of 7% bonds, due in 10 years. The bonds were issued for $515,707, and pay interest each July 1 and January 1. The effective-interest rate is 6%.
Exercise 14-7 On January 1, 2017, Vaughn Corporation issued $620,000 of 9% bonds, due in 8...
Exercise 14-7 On January 1, 2017, Vaughn Corporation issued $620,000 of 9% bonds, due in 8 years. The bonds were issued for $656,123, and pay interest each July 1 and January 1. The effective-interest rate is 8%. Prepare the company’s journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Vaughn uses the effective-interest method.
Brief Exercise 14-6 On January 1, 2017, Coronado Corporation issued $640,000 of 9% bonds, due in...
Brief Exercise 14-6 On January 1, 2017, Coronado Corporation issued $640,000 of 9% bonds, due in 8 years. The bonds were issued for $605,318, and pay interest each July 1 and January 1. Coronado uses the effective-interest method. Prepare the company’s journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Assume an effective-interest rate of 10%.
On January 1, 2020, Headland Corporation issued $580,000 of 9% bonds, due in 10 years. The...
On January 1, 2020, Headland Corporation issued $580,000 of 9% bonds, due in 10 years. The bonds were issued for $543,860, and pay interest each July 1 and January 1. Headland uses the effective-interest method. Prepare the company’s journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Assume an effective-interest rate of 10%.
IFRS 14-3 On January 1, 2017, Concord Corporation issued $510,000 of 6% bonds, due in 10...
IFRS 14-3 On January 1, 2017, Concord Corporation issued $510,000 of 6% bonds, due in 10 years. The bonds were issued for $473,758, and pay interest each July 1 and January 1. Prepare the company’s journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Assume an effective-interest rate of 7%.
On January 1, 2020, Ivanhoe Corporation issued $560,000 of 7% bonds, due in 10 years. The...
On January 1, 2020, Ivanhoe Corporation issued $560,000 of 7% bonds, due in 10 years. The bonds were issued for $521,948, and pay interest each July 1 and January 1. Ivanhoe uses the effective-interest method. Prepare the company’s journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Assume an effective-interest rate of 8%. (a) Jan. 1, 2020July 1, 2020Dec. 31, 2020 (b) Jan. 1, 2020July 1, 2020Dec. 31,...
On January 1, 2017, Martinez Corporation issued $650,000 of 9% bonds, due in 10 years. The...
On January 1, 2017, Martinez Corporation issued $650,000 of 9% bonds, due in 10 years. The bonds were issued for $609,499, and pay interest each July 1 and January 1. Martinez uses the effective-interest method. Prepare the company’s journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Assume an effective-interest rate of 10%. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal...
On January 1, 2020, Bonita Corporation issued $500,000 of 7% bonds, due in 10 years. The...
On January 1, 2020, Bonita Corporation issued $500,000 of 7% bonds, due in 10 years. The bonds were issued for $466,026, and pay interest each July 1 and January 1. Bonita uses the effective-interest method. Prepare the company’s journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Assume an effective-interest rate of 8%. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT