Question

P4. Coyote sold 10,000 shares of $1,000 par value, 8%, 10-year debenture bonds on 1/1/2018. The...

P4. Coyote sold 10,000 shares of $1,000 par value, 8%, 10-year debenture bonds on 1/1/2018. The interests will be paid on 12/31 of each year. The market interest rate was 6% as of 1/1/2018. Coyote retired these bonds for $9,600,000 on 1/1/2020.

Instructions: prepare any necessary journal entries for the followings using the effective interest method.

  1. The issuance of the bonds on 1/1/2018.
  2. Interest expense accrued in 2018 and 2019.
  3. Retirement of the bonds on 1/1/2020.
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
On January 1, 2018, Darnell Window and Pane issued $18.8 million of 10-year, zero-coupon bonds for...
On January 1, 2018, Darnell Window and Pane issued $18.8 million of 10-year, zero-coupon bonds for $6,621,068. (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: 2. Determine the effective rate of interest. 1. & 3. to 5. Prepare the necessary journal entries. Record the issuance of the bonds.Record annual interest expense at December 31, 2018.Record annual interest expense at December 31,...
Cupola Fan Corporation issued 8%, $560,000, 10-year bonds for $534,000 on June 30, 2018. Debt issue...
Cupola Fan Corporation issued 8%, $560,000, 10-year bonds for $534,000 on June 30, 2018. Debt issue costs were $3,100. Interest is paid semiannually on December 31 and June 30. One year from the issue date (July 1, 2019), the corporation exercised its call privilege and retired the bonds for $540,000. The corporation uses the straight-line method both to determine interest expense and to amortize debt issue costs. Required: Prepare the journal entry to record the issuance of the bonds, the...
On May 1, 2018 Small Inc issued $600,000 of 4% 10 year convertible bonds at 103....
On May 1, 2018 Small Inc issued $600,000 of 4% 10 year convertible bonds at 103. Each $1,000 bond is convertible into 20 of Small's common shares. Bonds without conversion feature would have sold at 101. Interest payments for the bonds are made on April 30 each year. (Small's year end). On May 1, 2020 30% of the bonds were converted. Prepare the journal entries to record the issuance of the convertible bonds on May 1 2018 and the conversion...
On January 1, 2018, Fowl Products issued $75 million of 7%, 10-year convertible bonds at a...
On January 1, 2018, Fowl Products issued $75 million of 7%, 10-year convertible bonds at a net price of $76.1 million. Fowl recently issued similar, but nonconvertible, bonds at 97 (that is, 97% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of Fowl’s no par common stock. Fowl records interest by the straight-line method.    On June 1, 2020, Fowl notified bondholders of its intent to call...
On January 1, 2018, Fowl Products issued $77 million of 7%, 10-year convertible bonds at a...
On January 1, 2018, Fowl Products issued $77 million of 7%, 10-year convertible bonds at a net price of $78.3 million. Fowl recently issued similar, but nonconvertible, bonds at 97 (that is, 97% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 25 shares of Fowl’s no par common stock. Fowl records interest by the straight-line method.    On June 1, 2020, Fowl notified bondholders of its intent to call...
On February 1, 2018, Sanford & Son issued 12% bonds dated February 1, 2018, with a...
On February 1, 2018, Sanford & Son issued 12% bonds dated February 1, 2018, with a face amount of $100,000. The bonds sold for $117,160 and mature in 20 years. The effective interest rate for these bonds was 10%. Interest is paid semiannually on July 31 and January 31. Sanford & Son's fiscal year is the calendar year. Required: 1. Prepare the journal entry to record the bond issuance on February 1, 2018. 2. Prepare the entry to record interest...
On January 1, 2018, Madison Products issued $42.0 million of 6%, 10-year convertible bonds at a...
On January 1, 2018, Madison Products issued $42.0 million of 6%, 10-year convertible bonds at a net price of $43.00 million. Madison recently issued similar, but nonconvertible, bonds at 99 (that is, 99% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of Madison’s no par common stock. Madison records interest by the straight-line method. On June 1, 2020, Madison notified bondholders of its intent to call the...
On January 1, 2018, Darnell Window and Pane issued $19.1 million of 10-year, zero-coupon bonds for...
On January 1, 2018, Darnell Window and Pane issued $19.1 million of 10-year, zero-coupon bonds for $7,363,877 (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: 2. Determine the effective rate of interest. Inerest rate......? 3. Prepare the necessary journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermedaite...
Cupola Fan Corporation issued 8%, $590,000, 10-year bonds for $561,000 on June 30, 2018. Debt issue...
Cupola Fan Corporation issued 8%, $590,000, 10-year bonds for $561,000 on June 30, 2018. Debt issue costs were $3,400. Interest is paid semiannually on December 31 and June 30. One year from the issue date (July 1, 2019), the corporation exercised its call privilege and retired the bonds for $565,000. The corporation uses the straight-line method both to determine interest expense and to amortize debt issue costs. Required: 1. to 4. Prepare the journal entry to record the issuance of...
On January 1, 2019, Gleason Corp. issued $700,000, 8% bonds payable to finance company expansion. The...
On January 1, 2019, Gleason Corp. issued $700,000, 8% bonds payable to finance company expansion. The bonds were dated January 1, 2019 and mature in four years on January 1, 2023. The bonds pay interest semi-annually each June 30th and December 31st. At the time of issuance, the market rate of interest for similarly risky investments was 6%. 1. At what amount were the bonds issued on January 1, 2019? 2. Prepare an amortization schedule for the life of the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT