Question

Garland Company received proceeds of $178600 on 10-year, 6% bonds issued on January 1, 2018. The...

Garland Company received proceeds of $178600 on 10-year, 6% bonds issued on January 1, 2018. The bonds had a face value of $190000, pay interest annually on January 1, and have a call price of 101. Garland uses the straight-line method of amortization. What is the carrying value of the bonds on January 1, 2020? $179740 $190000 $180880 $187492

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer:
Face Value of Bonds = $190,000
Proceeds from issuance of bonds = $178,600

Discount on Bonds Payable = Face Value of Bonds - Proceeds from issuance of bonds
Discount on Bonds Payable = $190,000 - $178,600
Discount on Bonds Payable = $11,400

Life of Bonds = 10 years

Discount on Bonds to be amortized annually = Discount on Bonds Payable on issuance / Life of Bonds
Discount on Bonds to be amortized annually = $11,400 / 10
Discount on Bonds to be amortized annually = $1,140

Discount amortized = Discount on Bonds to be amortized annually * Life expired
Discount amortized = $1,140 * 2
Discount amortized = $2,280

Carrying Value of Bonds = Issue Price + Discount amortized
Carrying Value of Bonds = $178,600 + $2,280
Carrying Value of Bonds = $180,880

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
Crane Company received proceeds of $799500 on 10-year, 9% bonds issued on January 1, 2019. The...
Crane Company received proceeds of $799500 on 10-year, 9% bonds issued on January 1, 2019. The bonds had a face value of $848000, pay interest annually on December 31, and have a call price of 103. Crane uses the straight-line method of amortization. What is the carrying value of the bonds on January 1, 2021? $809200 $848000 $838300 $804350
41-45 Herman Company received proceeds of $188,500 on 10-year, 8% bonds issued on January 1, 2009....
41-45 Herman Company received proceeds of $188,500 on 10-year, 8% bonds issued on January 1, 2009. The bonds had a face value of $200,000, pay interest semi-annually on June 30 and December 31, and have a call price of 101. Herman uses the straight-line method of amortization. What is the carrying value of the bonds on January 1, 2011? $200,000 $190,800 $197,700 $189,650 Depletion expense for a period is only recognized on natural resources that have been extracted and sold...
On January 1, 2018, Madison Products issued $42.0 million of 6%, 10-year convertible bonds at a...
On January 1, 2018, Madison Products issued $42.0 million of 6%, 10-year convertible bonds at a net price of $43.00 million. Madison recently issued similar, but nonconvertible, bonds at 99 (that is, 99% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of Madison’s no par common stock. Madison records interest by the straight-line method. On June 1, 2020, Madison notified bondholders of its intent to call the...
On January 1, 2018, Baltimore Company issued $250,000 face value, 8%, 5-year bonds at 102. Interest...
On January 1, 2018, Baltimore Company issued $250,000 face value, 8%, 5-year bonds at 102. Interest is paid annually on January 1. Baltimore uses the straight-line method for amortization. Use this information to determine the dollar value of the interest expense for the 2018 fiscal year. Round your answer to the nearest whole dollar.
McSteamyCompany issued bonds $293,000 of 5 year, 9 percent bonds on January 1, 2018, at 96....
McSteamyCompany issued bonds $293,000 of 5 year, 9 percent bonds on January 1, 2018, at 96. interest is payable in cash annually on December 31. The straight-line method is used for amortization. What is the carrying value of the bond on December 31, 2018?
On January 1, 2018, Fowl Products issued $75 million of 7%, 10-year convertible bonds at a...
On January 1, 2018, Fowl Products issued $75 million of 7%, 10-year convertible bonds at a net price of $76.1 million. Fowl recently issued similar, but nonconvertible, bonds at 97 (that is, 97% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of Fowl’s no par common stock. Fowl records interest by the straight-line method.    On June 1, 2020, Fowl notified bondholders of its intent to call...
On January 1, 2018, Fowl Products issued $77 million of 7%, 10-year convertible bonds at a...
On January 1, 2018, Fowl Products issued $77 million of 7%, 10-year convertible bonds at a net price of $78.3 million. Fowl recently issued similar, but nonconvertible, bonds at 97 (that is, 97% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 25 shares of Fowl’s no par common stock. Fowl records interest by the straight-line method.    On June 1, 2020, Fowl notified bondholders of its intent to call...
The Square Foot Grill, Inc. issued $167,000 of 10-year, 8 percent bonds on January 1, 2018,...
The Square Foot Grill, Inc. issued $167,000 of 10-year, 8 percent bonds on January 1, 2018, at 102. interest is payable in cash annually on December 31. The straight-line method is used for amortization. a. Determine the carrying value (face value less discount or plus premium) of the bond liability as of December 31, 2018. b. Determine the amount of interest expense reported on the 2018 income statement. c. Determine the carrying value of the bond liability as of December...
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,...
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...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT