Question

On July 1, 2016, Rio Corporation issued bonds with a face value of $100,000 and 12%...

On July 1, 2016, Rio Corporation issued bonds with a face value of $100,000 and 12% interest payable semiannually. The bonds mature on June 30, 2021. The market rate of interest at the time of issuance was 14%. Rio Corporation uses the effective interest method.

Calculate the proceeds on the bonds. Record the journal entries for July 1, 2016 and December 31, 2016.

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
On January 1, 2016, Bishop Company issued 8% bonds dated January 1, 2016, with a face...
On January 1, 2016, Bishop Company issued 8% bonds dated January 1, 2016, with a face amount of $20.6 million. The bonds mature in 2025 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. 1. Determine the price of the bonds at January 1, 2016 2.Prepare the journal entry to record the bond issuance by Bishop on January 1, 2016 3.Prepare the journal entry to...
On February 1, 2021, Wolf Inc. issued 10% bonds dated February 1, 2021, with a face...
On February 1, 2021, Wolf Inc. issued 10% bonds dated February 1, 2021, with a face amount of $200,000. The bonds sold for $239,588 and mature in 20 years. The effective interest rate for these bonds was 8%. Interest is paid semiannually on July 31 and January 31. Wolf's fiscal year is the calendar year. Wolf uses the effective interest method of amortization. Required: 1. Prepare the journal entry to record the bond issuance on February 1, 2021. 2. Prepare...
The Bradford Company issued 12% bonds, dated January 1, with a face amount of $96 million...
The Bradford Company issued 12% bonds, dated January 1, with a face amount of $96 million on January 1, 2021. The bonds mature on December 31, 2030 (10 years). For bonds of similar risk and maturity, the market yield is 14%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine...
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.
The Windy City Company issued $500,000 of 12% bonds on January 1, 2016. The bonds were...
The Windy City Company issued $500,000 of 12% bonds on January 1, 2016. The bonds were sold for $549,493, and they were expected to yield 10% interest compounded semiannually. The interest dates are June 30 and December 31. The maturity date of the bonds is December 31, 2022. Required: a. Prepare the journal entry to record the issuance of the bonds. b. Using the effective interest method, prepare the journal entries to record the first two interest payments.
On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $6,800,000 of 9-year, 8%...
On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $6,800,000 of 9-year, 8% bonds at a market (effective) interest rate of 10%, receiving cash of $6,005,104. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds...
Stellar Corporation issued $550,000 of 7% bonds on November 1, 2017, for $584,545. The bonds were...
Stellar Corporation issued $550,000 of 7% bonds on November 1, 2017, for $584,545. The bonds were dated November 1, 2017, and mature in 8 years, with interest payable each May 1 and November 1. Stellar uses the effective-interest method with an effective rate of 6%. Record Journal entries for issuance on November 1 and Record Jorunal entries for December 31, 2017, adjusting entry. Record Journal entries for interest payable each May 1 2018 Please show calucation
On December 31, 2019, when the market rate was 12%, Ricken Corp issued $2,000,000, 14%, 5-year...
On December 31, 2019, when the market rate was 12%, Ricken Corp issued $2,000,000, 14%, 5-year bonds. Interest is payable semiannually on June 30 and December 31. The bonds were issued for $2,147,214, and the corporation uses the effective interest method of amortizing bond premium or discount. Prepare the journal entries to record the issuance of the bonds and the first interest payment.
Cupola Fan Corporation issued 12%, $410,000, 10-year bonds for $394,000 on June 30, 2021. Debt issue...
Cupola Fan Corporation issued 12%, $410,000, 10-year bonds for $394,000 on June 30, 2021. Debt issue costs were $1,600. Interest is paid semiannually on December 31 and June 30. One year from the issue date (July 1, 2022), the corporation exercised its call privilege and retired the bonds for $404,000. The corporation uses the straight-line method both to determine interest expense and to amortize debt issue costs. Required: 1. to 4. Prepare the journal entries to record the issuance of...
On January 1, 2021, Bishop Company issued 8% bonds dated January 1, 2021, with a face...
On January 1, 2021, Bishop Company issued 8% bonds dated January 1, 2021, with a face amount of $20.7 million. The bonds mature in 2030 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your intermediate calculations to...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT