Question

**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.

Answer #1

Journal Entry | ||||||||

Date | Transaction | Debit | Credit | |||||

1-Jan-17 | Cash | $656,123 | ||||||

To Premium on Bond | $36,123 | |||||||

To Bonds Payable | $620,000 | |||||||

1-Jul-17 | Interest Expense | $26,244.92 | (656123*4%) | |||||

Premium on Bonds Payable | $1,655.08 | |||||||

To Cash | $27,900.0 | (620000*4.5%) | ||||||

31-Dec | Interest Expense | $26,178.72 | (656123-1655.08)*4% | |||||

Premium on Bonds Payable | $1,721.28 | |||||||

To Interest Payable | $27,900.0 | (620000*4.5%) | ||||||

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, 2017, Vaughn Corporation issued $680,000 of 9%
bonds, due in 8 years. The bonds were issued for $643,151, and pay
interest each July 1 and January 1. Vaughn 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...

Brief Exercise 14-7
On January 1, 2017, Splish Corporation issued $590,000 of 9%
bonds, due in 8 years. The bonds were issued for $624,376, 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. Splish uses the effective-interest method.
(Round intermediate calculations to 6 decimal places,
e.g. 1.251247 and final answer to...

Brief Exercise 14-6 On January 1, 2017, Whispering 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.
Whispering 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...

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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%.

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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%.

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, 2020, Novak Corporation issued $570,000 of 9%
bonds, due in 8 years. The bonds were issued for $603,210, 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. Novak uses the effective-interest method. (Round
intermediate calculations to 6 decimal places, e.g. 1.251247 and
final answer to 0 decimal places,...

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, 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,...

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