Question

On January? 31, 2016 Driftwood ?Logistics, Inc., issued five-year, 9?% bonds payable with a face value...

On January? 31, 2016 Driftwood ?Logistics, Inc., issued five-year, 9?% bonds payable with a face value of $11,000,000.The bonds were issued at 93 and pay interest on January 31 and July 31. Driftwood Logistics, Inc., amortizes bond discount by the? straight-line method.

a. Record the issuance of the bond payable on January? 31, 2016.

b. Record the payment of semiannual interest and amortization of bond discount on July? 31,2016.

c. Record the interest accrual and discount amortization on December? 31, 2016. ?(Do not round intermediary calculations. Only round the final amount to the nearest whole? dollar.)

?

Homework Answers

Answer #1

Journal entry :

No Date Accounts & explanation debit credit
1 January 31,2016 Cash (11000000*.93) 10230000
Discount on bonds payable 770000
Bonds payable 11000000
(To record bonds issue)
2 July 31, 2016 Interest expense 572000
Discount on bonds payable (770000/10) 77000
Cash (11000000*9%*6/12) 495000
(To record interest)
3 Dec 31, 2016 Interest expense 476667
Discount on bonds payable (770000/60*5) 64167
Interest payable (11000000*9%*5/12) 412500
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
On January​ 31, 2018​, Logo ​Logistics, Inc., issued ten​-year, 9​% bonds payable with a face value...
On January​ 31, 2018​, Logo ​Logistics, Inc., issued ten​-year, 9​% bonds payable with a face value of $7,000,000. The bonds were issued at 97 and pay interest on January 31 and July 31. Logo Logistics amortizes bond discounts using the​ straight-line method. Record​ (a) the issuance of the bonds on January​ 31, 2018​, ​(b) the semiannual interest payment and amortization of the bond discount on July​ 31, 2018​, and​ (c) the interest accrual and discount amortization on December​ 31, 2018.
On January? 31, 20142014?, DurkinDurkin ?Logistics, Inc., issued tenten?-year, 77?% bonds payable with a face value...
On January? 31, 20142014?, DurkinDurkin ?Logistics, Inc., issued tenten?-year, 77?% bonds payable with a face value of $ 5 comma 000 comma 000$5,000,000. The bonds were issued at 9898 and pay interest on January 31 and July 31. DurkinDurkin ?Logistics, Inc., amortizes bond discount by the?straight-line method. Requirement 1. Record? (a) issuance of the bonds on January? 31, (b) the semiannual interest payment and amortization of bond discount on July? 31, and? (c) the interest accrual and discount amortization on...
On January 31, 2016 Muscle Sports Cars issued 10-year, 4% bonds with a face value of...
On January 31, 2016 Muscle Sports Cars issued 10-year, 4% bonds with a face value of $100,000. The bonds were issued at 94 and pay interest on January 31 and June 30. Muscle amortizes their bonds by the straight-line method. Record (a) issuance of the bonds on January 31, (b) the semi-annual interest payment and discount amortization on June 30, and (c) the interest accrual and discount amortization on December 31.
Presto Company issued $240,000, 9%, 20-year bonds on January 1, 2012, at 103. Interest is payable...
Presto Company issued $240,000, 9%, 20-year bonds on January 1, 2012, at 103. Interest is payable semiannually on July 1 and January 1. Presto uses straight-line amortization for bond premium or discount. Interest is not accrued on June 30. Instructions: Prepare the journal entries to record the following. a. The issuance of the bonds. b. The payment of interest and the premium amortization on July 1, 2012. c. The accrual of interest and the premium amortization on December 31, 2012....
On January 1, 2016, Solo Inc. issued 368,000 of its 9% bonds at 95. Interest is...
On January 1, 2016, Solo Inc. issued 368,000 of its 9% bonds at 95. Interest is payable semiannually on July 1 and December 31. The bonds mature in ten years. Solo uses straight-line amortization. The carrying value of the bond on December 31, 2016 would be:
Champs Ltd. is authorized to issue $3,500,000 of 4?%, 10?-year bonds payable. On December? 31, 2016?,...
Champs Ltd. is authorized to issue $3,500,000 of 4?%, 10?-year bonds payable. On December? 31, 2016?, when the market interest rate is 5?%, the company issues $2,800,000 of the bonds. Champs Ltd. amortizes bond discount by the? effective-interest method. The semiannual interest dates are June 30 and December 31. Requirements 1. Use the PV function in Excel to calculate the issue price of the bonds. 2. Prepare a bond amortization table for the first year of the bond 3. Record...
Effective Interest Amortization On January 1, Eagle, Inc., issued $950,000 of 9%, 20-year bonds for $1,016,500...
Effective Interest Amortization On January 1, Eagle, Inc., issued $950,000 of 9%, 20-year bonds for $1,016,500 yielding an effective interest rate of 8%. Semiannual interest is payable on June 30 and December 31 each year. The firm uses the effective interest method to amortize the premium. Required a. Prepare an amortization schedule showing the necessary information for the first two interest periods. Round amounts to the nearest dollar. b. Prepare the journal entry for the bond issuance on January 1....
Hiscus​, ​Inc., issued $ 350 comma 000 of 5​-year, 5 percent bonds payable on January 1....
Hiscus​, ​Inc., issued $ 350 comma 000 of 5​-year, 5 percent bonds payable on January 1. Hiscus​, ​Inc., pays interest each January 1 and July 1 and amortizes any discount or premium by the​ straight-line method. Hiscus​, ​Inc., can issue its bonds payable under various​ conditions: LOADING...​(Click the icon to view the​ conditions.) Read the requirementsLOADING.... Requirement 1. Journalize Hiscus​'s issuance of the bonds and first semiannual interest payment for each situation. Explanations are not required.
Reporting Financial Statement Effects of Bond Transactions On January 1, 2016, McKeown, Inc., issued $350,000 of...
Reporting Financial Statement Effects of Bond Transactions On January 1, 2016, McKeown, Inc., issued $350,000 of 10%, 9-year bonds for $312,103, yielding a market (yield) rate of 12%. Semiannual interest is payable on June 30 and December 31 of each year. Required a. Show computations to confirm the bond issue price. b. Prepare journal entries to record the bond issuance, semiannual interest payment and discount amortization on June 30, 2016, and semiannual interest payment and discount amortization on December 31,...
Lorance Corporation issued $845,000, 9%, 10-year bonds on January 1, 2015, for $792,347. This price resulted...
Lorance Corporation issued $845,000, 9%, 10-year bonds on January 1, 2015, for $792,347. This price resulted in an effective-interest rate of 10% on the bonds. Interest is payable semiannually on July 1 and January 1. Lorance uses the effective-interest method to amortize bond premium or discount. 1)Prepare the journal entry to record the issuance of the bonds. 2)Prepare the journal entry to record the payment of interest and the discount amortization on July 1, 2015, assuming that interest was not...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT