Question

A company issued 6% bonds with face value of Rs 1000 crores at a discount of...

A company issued 6% bonds with face value of Rs 1000 crores at a discount of 5% in April 2018. The issue cost of the bond amounted to 2% of the face value. If the effective rate of interest was 7% then determine the carrying amount of bond in the balance sheet as on 31.03.2020

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
Diaz Company issued $180,000 face value bonds on January 1, 2018. The bonds had a 7%...
Diaz Company issued $180,000 face value bonds on January 1, 2018. The bonds had a 7% stated rate of interest and a five-year term. Interest paid in cash annually, beginning December 31, 2018. The bonds were at 98. The straight-line method is used for amortization. a). Use a financial statements model like the one shown below to demonstrate how (1) January 1, 2018, bond issue and (2) December 31, 2018, recognition of interest expense, including the amortization of the discount,...
On January 1, Year 1, Young Company issued bonds with a face value of $132,000, a...
On January 1, Year 1, Young Company issued bonds with a face value of $132,000, a stated rate of interest of 16 percent, and a 10-year term to maturity. Interest is payable in cash on December 31 of each year. The effective rate of interest was 15 percent at the time the bonds were issued. The bonds sold for $138,625. Young used the effective interest rate method to amortize the bond premium. Required: a. Determine the amount of the premium...
Diaz Company issued bonds with a $98,000 face value on January 1, Year 1. The bonds...
Diaz Company issued bonds with a $98,000 face value on January 1, Year 1. The bonds had a 6 percent stated rate of interest and a 10-year term. Interest is paid in cash annually, beginning December 31, Year 1. The bonds were issued at 97. The straight-line method is used for amortization. b. Determine the carrying value (face value less discount or plus premium) of the bond liability as of December 31, Year 1. c. Determine the amount of interest...
1,The carrying value of a bond issued at a discount is its face value less the...
1,The carrying value of a bond issued at a discount is its face value less the unamortized portion of the discount?True or false? 2. What happens to the carrying value of bonds issued at a premium over the life of the bond issued ? a.decreases b.decreases c.stays the same 3.the issuance price on bonds sold at par value is a. less than the face value b. equal to the face value c. greater than the face value d. not determinable...
On January 1, Year 1, Parker Company issued bonds with a face value of $75,000, a...
On January 1, Year 1, Parker Company issued bonds with a face value of $75,000, a stated rate of interest of 6 percent, and a five-year term to maturity. Interest is payable in cash on December 31 of each year. The effective rate of interest was 8 percent at the time the bonds were issued. The bonds sold for $69,011. Parker used the effective interest rate method to amortize the bond discount. (Round your intermediate calculations and final answers to...
Diaz Company issued bonds with a $127,000 face value on January 1, Year 1. The bonds...
Diaz Company issued bonds with a $127,000 face value on January 1, Year 1. The bonds had a 7 percent stated rate of interest and a 10-year term. Interest is paid in cash annually, beginning December 31, Year 1. The bonds were issued at 97. The straight-line method is used for amortization. Requireda. Use a financial statements model like the one shown next to demonstrate how (1) the January 1, Year 1, bond issue and (2) the December 31, Year...
On January 1, Year 1, Sheffield Co. issued bonds with a face value of $400,000, a...
On January 1, Year 1, Sheffield Co. issued bonds with a face value of $400,000, a term of ten years, and a stated interest rate of 6%. The bonds were issued at 107, and interest is payable each December 31. Sheffield uses the straight-line method to amortize the bond discount. The carrying value of the bonds that would be reported on the December 31, Year 4 balance sheet is:
On January 1, Year 1 Residence Company issued bonds with a $50,000 face value. The bonds...
On January 1, Year 1 Residence Company issued bonds with a $50,000 face value. The bonds were issued at 96 offering a 4% discount. They had a 20 year term, a stated rate of interest of 7%, and an effective rate of interest of 7.389%. Assuming Residence uses the effective interest rate method, the book value of the bond liability on December 31, Year 2 is (round any necessary computations to the nearest whole dollar)
Notes issued at a discount , face value of notes 4,000,000 nominal rate 6%, effective rate...
Notes issued at a discount , face value of notes 4,000,000 nominal rate 6%, effective rate 8%, The note is issued on January 1, 2017 and mature in four years on January 1,2021. The interest is payable annually every December 31, Since the interest is payable annually there are 4 interest periods . The relevant present value factors are: PV of 1 at 8% for 4 periods .7350 PV of ordinary annuity of 1 at 8% for 4 periods 3.3121...
On June 30, 2020, Ayayai Company issued $4,180,000 face value of 13%, 20-year bonds at $4,494,460,...
On June 30, 2020, Ayayai Company issued $4,180,000 face value of 13%, 20-year bonds at $4,494,460, a yield of 12%. Ayayai uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31. Show the proper balance sheet presentation for the liability for bonds payable on the December 31, 2021, balance sheet
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT