Question

Journalize these transactions Jonny Cakes issued callable bonds with a par value of $100,000. The call...

Journalize these transactions

  1. Jonny Cakes issued callable bonds with a par value of $100,000. The call option requires the company to pay a call premium of $3,000 to bondholders plus the par value. After the June 30th interest payment, the bonds have a carrying value of $104,500.
  2. A  $500,000 bond issue on which there is an unamortized discount of $40,000 is redeemed for $475,000.
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
Tyrell Company issued callable bonds with a par value of $48,000. The call option requires Tyrell...
Tyrell Company issued callable bonds with a par value of $48,000. The call option requires Tyrell to pay a call premium of $500 plus par (or a total of $48,500) to bondholders to retire the bonds. On July 1, Tyrell exercises the call option. The call option is exercised after the semiannual interest is paid the day before on June 30. Record the entry to retire the bonds under each separate situation. 1. The bonds have a carrying value of...
Ten Year, 6% Bonds with a $4,000,000 par value , were issued at a time when...
Ten Year, 6% Bonds with a $4,000,000 par value , were issued at a time when the market rate of interest was 8%. The Discount /Premium on these Bonds is amortized semi -annually each interest period. Given these facts, which of the following statements would be true? a. The amount of unamortized premium decreases from its balance at issuance date and the carrying value of the Bond increases. b. The amount of unamortized discount decreases from its balance at issuance...
Assume that a company issues 15-years bonds (call it bonds A) at their par value of...
Assume that a company issues 15-years bonds (call it bonds A) at their par value of $1,000. These bond have $70 in interest every quarter These bonds are selling at $1000 issue price. This company realizes that to expand their business to the surrounding area. They need an additional $5,000,000 in long-term debt. They decided to issue 12-year, $1,000 par value bonds (Call it bonds B) that pay only $40 in interest every quarter. Assume also that A and B...
On June 30, 2012, Windsor Company issued 12% bonds with a par value of $750,000 due...
On June 30, 2012, Windsor Company issued 12% bonds with a par value of $750,000 due in 20 years. They were issued at 98 and were callable at 104 at any date after June 30, 2020. Because of lower interest rates and a significant change in the company’s credit rating, it was decided to call the entire issue on June 30, 2021, and to issue new bonds. New 8% bonds were sold in the amount of $1,020,000 at 101; they...
Exercise 14-14 On June 30, 2009, Sheridan Company issued 12% bonds with a par value of...
Exercise 14-14 On June 30, 2009, Sheridan Company issued 12% bonds with a par value of $840,000 due in 20 years. They were issued at 98 and were callable at 103 at any date after June 30, 2017. Because of lower interest rates and a significant change in the company’s credit rating, it was decided to call the entire issue on June 30, 2018, and to issue new bonds. New 8% bonds were sold in the amount of $1,060,000 at...
Notson Co. issued 12% bonds with a face value of $1,800,000 at a premium to yield...
Notson Co. issued 12% bonds with a face value of $1,800,000 at a premium to yield 10%, with interest paid on June 30 and December 31. These bonds had a carrying value of $1,872,000 on December 31, 2019. Notson uses the effective interest method of amortization. On June 30, 2020, several years before their maturity, Notson retired the bonds at 105 plus accrued interest. Direct costs associated with the bond retirement totaled $3,000. Compute: The carrying value of the bonds...
On June 30, 2012, Skysong Company issued 12% bonds with a par value of $780,000 due...
On June 30, 2012, Skysong Company issued 12% bonds with a par value of $780,000 due in 20 years. They were issued at 97 and were callable at 105 at any date after June 30, 2020. Because of lower interest rates and a significant change in the company’s credit rating, it was decided to call the entire issue on June 30, 2021, and to issue new bonds. New 8% bonds were sold in the amount of $960,000 at 102; they...
Sylvestor Company issues 10%, five-year bonds, on December 31, 2016, with a par value of $100,000...
Sylvestor Company issues 10%, five-year bonds, on December 31, 2016, with a par value of $100,000 and semiannual interest payments. Semiannual Period-End Unamortized Discount Carrying Value (0) 12/31/2016 $ 7,360 $ 92,640 (1) 6/30/2017 6,624 93,376 (2) 12/31/2017 5,888 94,112       Use the above bond amortization table and prepare journal entries to record (a) the issuance of bonds on December 31, 2016; (b) the first interest payment on June 30, 2017; and (c) the second interest payment on December 31,...
On September 30, 2012, Blossom Company issued 9% bonds with a par value of $470,000 due...
On September 30, 2012, Blossom Company issued 9% bonds with a par value of $470,000 due in 20 years. They were issued at 98 and were callable at 105 at any date after September 30, 2017. Because Blossom Company was able to obtain financing at lower rates, it decided to call the entire issue on September 30, 2018, and to issue new bonds. New 8% bonds were sold in the amount of $740,000 at 103; they mature in 20 years....
Woodwick Company issues 7%, five-year bonds, on December 31, 2016, with a par value of $94,000...
Woodwick Company issues 7%, five-year bonds, on December 31, 2016, with a par value of $94,000 and semiannual interest payments. Semiannual Period-End Unamortized Premium Carrying Value (0) 12/31/2016 $ 7,991 $ 101,991 (1) 6/30/2017 7,192 101,192 (2) 12/31/2017 6,393 100,393 Use the above straight-line bond amortization table and prepare journal entries for the following. (a) The issuance of bonds on December 31, 2016. (b) The first interest payment on June 30, 2017. (c) The second interest payment on December 31,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT