Question

Present Value of $1 PV of Annuity of $1 Issuance of a Bond at Face Value...

Present Value of $1 PV of Annuity of $1

Issuance of a Bond at Face Value

On January 1, 2017, Whitefeather Industries issued 1,100, $1,000 face value bonds. The bonds have a(n) 10-year life and pay interest at the rate of 10%. Interest is paid semiannually on July 1 and January 1. The market rate of interest on January 1 was 10%. Use the present value tables that may be found by clicking on the present value table links above. Round your answer to the nearest dollar.

Identify and analyze the effect of the payment of interest on July 1, 2017.

How does this entry affect the accounting equation?
If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign.

Balance Sheet Income Statement
Stockholders' Net
Assets = Liabilities + Equity Revenues – Expenses = Income
Cash fill in the blank ee46f1005027040_2 No Entry fill in the blank ee46f1005027040_4 fill in the blank ee46f1005027040_5 No Entry fill in the blank ee46f1005027040_7 Interest Expense fill in the blank ee46f1005027040_9 fill in the blank ee46f1005027040_10

Feedback

Partially correct

4. Calculate the amount of interest accrued on December 31, 2017. If required, round your answer to the nearest dollar.
$fill in the blank 5fff2a0abfb4ff2_1

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Solution:

1.

4. Calculate the amount of interest accrued on December 31, 2017. If required, round your answer to the nearest dollar. = $1100*1000*5% = $55000 is the accrued interest on January 31,2017.

Since the market rate and the coupon rate are equal, the bond is issude at par and hence no amortizaion of discount or premium

Hope this helps! In case of any clarifications, kindly use the comment box below

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
Koffman's Warehouse purchased a forklift on January 1, 2017, for $500,000. The forklift is expected to...
Koffman's Warehouse purchased a forklift on January 1, 2017, for $500,000. The forklift is expected to last for five years and have a residual value of $11,000. Koffman's uses the double-declining-balance method for depreciation. Required: 1. Calculate the depreciation expense, accumulated depreciation, and book value for each year of the forklift's life. If necessary, round any depreciation calculations to the nearest dollar. Year Annual Depreciation Accumulated Depreciation Book Value 2017 $fill in the blank 9e987403505efec_1 $fill in the blank 9e987403505efec_2...
Bond Discount, Entries for Bonds Payable Transactions On July 1, 2016, Brower Industries Inc. issued $5,500,000...
Bond Discount, Entries for Bonds Payable Transactions On July 1, 2016, Brower Industries Inc. issued $5,500,000 of 7-year, 11% bonds at a market (effective) interest rate of 12%, receiving cash of $5,244,387. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 2016. For a compound...
Requirement 1. Determine the present value of six​-year bonds payable with face value of $ 87000...
Requirement 1. Determine the present value of six​-year bonds payable with face value of $ 87000 and stated interest rate of 10​%, paid semiannually. The market rate of interest is 10​% at issuance. ​(Round intermediary calculations and final answer to the nearest whole​ dollar.) Present Value When market rate of interest is 10% annually $? Requirement 2. Same bonds payable as in requirement​ 1, but the market interest rate is 14​%. ​(Round intermediary calculations and final answer to the nearest...
On January​ 1, 2018, bonds with a face value of $ 115,000 were sold. The bonds...
On January​ 1, 2018, bonds with a face value of $ 115,000 were sold. The bonds mature on January​ 1, 2028. The face interest rate is 6​%. The bonds pay interest semiannually on July 1 and January 1. The market rate of interest is 12​%. What is the market price of the bonds on January​ 1, 2018? The present value of​ $1 for 20 periods at 6​% is 0.312. The present value of an ordinary annuity of​ $1 for 20...
Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1, Danzer Industries Inc. issued...
Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1, Danzer Industries Inc. issued $6,900,000 of 7-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $6,569,162. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1. If...
On July 1, Year 1, Danzer Industries Inc. issued $2,200,000 of 9-year, 10% bonds at a...
On July 1, Year 1, Danzer Industries Inc. issued $2,200,000 of 9-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $2,076,302. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1. If an amount box does not require an...
Make sure do all parts I'll rate Bond Discount, Entries for Bonds Payable Transactions On July...
Make sure do all parts I'll rate Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $3,400,000 of 9-year, 10% bonds at a market (effective) interest rate of 12%, receiving cash of $3,031,861. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from...
Cash Dividends The Stockholders' Equity section of Jackson Company's balance sheet as of January 1, 2017,...
Cash Dividends The Stockholders' Equity section of Jackson Company's balance sheet as of January 1, 2017, appeared as follows: Preferred stock, $100 par, 8%, 2,000 shares issued and outstanding $200,000 Common stock, $10 par, 5,000 shares issued and outstanding 50,000 Additional paid-in capital 300,000 Total contributed capital $550,000 Retained earnings 400,000 Total stockholders’ equity $950,000 The notes that accompany the financial statements indicate that Jackson has not paid dividends for the two years prior to 2017. On July 1, 2017,...
On January 1, 2016, Orion Corporation issued 6% bonds with a face value of $5,000,000. The...
On January 1, 2016, Orion Corporation issued 6% bonds with a face value of $5,000,000. The bonds mature in 10 years. Interest is paid semiannually on June 30 and December 31. The bonds were sold for $4,320,500 to yield 8%. Orion uses a calendar-year reporting period. Using the effective-interest method of amortization, what amount of interest expense should be reported for year 2017? Round your answer to nearest dollar.
On January 1, 2017, Candlestick, Inc. sells $100,000, five-year, 10 % bonds for 92.639% of face...
On January 1, 2017, Candlestick, Inc. sells $100,000, five-year, 10 % bonds for 92.639% of face value. On the other hand, the same company sells 108.111% of face value on July 1, 2017. Pass the necessary journal entry for issuance of bonds. On January 1, 2017, Candlestick, Inc. sells $100,000, five-year, 10 % bonds for 92.639% of face value. On the other hand the same company sells 108.111% of face value on July 1, 2017. Pass the necessary journal entry...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT