Question

On January 1, 2019, Zoom corporation issued a $600,000 par value, 5%, 10-year bond. Interest will...

On January 1, 2019, Zoom corporation issued a $600,000 par value, 5%, 10-year bond. Interest will be paid every December 31.

a) prepare journal entries for: 1) issuance, and 2) the first interest payment if the bond is issued at par value.
b) what happens when the market interest rate equals 6%? Calculate the bond price.
c) Prepare the journal entry for the bond issued when the market interest rate is 6%.

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
January 1, 2019 ABEF company issued 5-year bonds with a par value of $1,000,000 and a...
January 1, 2019 ABEF company issued 5-year bonds with a par value of $1,000,000 and a 6% annual stated rate of interest. The issue price of the bond was $950,000. Interest payments are made semiannually. Any premiums or discounts should amortized using the straight line method. (Remember when amortizing pay attention to how many periods) Prepare Journal Entries for the following A) Record the issuance of the bonds B) Record interest expense at June 30, 2019 C) Record interest expense...
On January 1, 2019, Denver Corporation issued 10-year, 4% bond with a maturity value of $260,000....
On January 1, 2019, Denver Corporation issued 10-year, 4% bond with a maturity value of $260,000. The bonds sells at 94.00 and pay interest on July 1 and January 1. Denver Corporation amortizes the bond using the effective interest rate method. The market rate is 5%. Required Prepare the journal entries to record the sale of the bond, the interest expense for July 1 and the interest accrual for December 31 (company has a year end of December 31). Explanations...
On January 1, 2020, JWS Corporation issued $600,000 of 7% bonds, due in 10 years. The...
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, 2017, Tamarisk Inc. issued $490,000 of 6%, 5-year bonds at par. Interest is...
On January 1, 2017, Tamarisk Inc. issued $490,000 of 6%, 5-year bonds at par. Interest is payable semiannually on July 1 and January 1. Prepare journal entries to record the following. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.) (a) The issuance of the bonds....
On January 1, 2017, Powell Corporation issued $600,000, 5%, 5-year bonds dated January 1, 2017, at...
On January 1, 2017, Powell Corporation issued $600,000, 5%, 5-year bonds dated January 1, 2017, at 95. The bonds pay annual interest on January 1. The company uses the effective interest method of amortization and has a calendar year end. The market interest rate is 6%. Prepare all the journal entries that Powell Corporation would make related to this bond issue through January 1, 2018. Be sure to indicate the date on which the entries would be made. January 1,...
On January 1, Boston Enterprises issues bonds that have a $1,550,000 par value, mature in 20...
On January 1, Boston Enterprises issues bonds that have a $1,550,000 par value, mature in 20 years, and pay 7% interest semiannually on June 30 and December 31. The bonds are sold at par. 1. How much interest will Boston pay (in cash) to the bondholders every six months? 2. Prepare journal entries to record (a) the issuance of bonds on January 1, (b) the first interest payment on June 30, and (c) the second interest payment on December 31....
6. On January 1, 2019, Larkspur Corporation issued $500,000, 10%, 5-year bonds, at 98. The bonds...
6. On January 1, 2019, Larkspur Corporation issued $500,000, 10%, 5-year bonds, at 98. The bonds pay semiannual interest on January 1 and July 1. The company uses the straight-line method of amortization for bond premium and discount. Prepare all of the journal entries that Larkspur Corporation would make related to this bond issue on a) The January 1, 2019 issue date. b) The July 1, 2019 interest payment date. c) Based on the above information, what was the carrying...
41) On January 1, 20X3, Middleton Industries issued $5 million of 5-year, 9% debentures at par...
41) On January 1, 20X3, Middleton Industries issued $5 million of 5-year, 9% debentures at par which are dated as of January 1, 20X3. Prepare the journal entries to record the (a) issuance of the bonds. (b) the first semi-annual interest payment. (c) the payment of maturity value. 42) Callton, Inc., had a 6-year, 8%, $375,000 bonds ready to be sold on January 1, 20X3. The bonds will pay interest every June 30 and December 31. However, due to market...
Lauren Corporation authorized a $2,000,000, 10-year, 8% bond issue dated January 1, 2018, with semi-interest to...
Lauren Corporation authorized a $2,000,000, 10-year, 8% bond issue dated January 1, 2018, with semi-interest to be paid each December 3 On January 1, 2018, the bonds were issued for $2,294,000 to yield a market interest rate of 6%. Required (10 points): Were the bonds sold at par, at a discount, or at a premium? Prepare the entry to record the issuance of the bonds. Prepare the entry to record the interest payment on December 31, 2018, assuming the effective-interest...
On January 1, 2019, Rufus Company issued $4,000,000 par value, 4%, bonds that mature on December...
On January 1, 2019, Rufus Company issued $4,000,000 par value, 4%, bonds that mature on December 31, 2029. The bonds were issued at 102 to yield a return of 3% to investors. Interest on the bonds is paid annually on December 31 each year. Please prepare the entry to record the issuance of the bonds on January 1, 2019. Prepare the entry to record the payment of interest on the bonds on December 31, 2019. (SHOW ALL WORK)