Question

Intel Inc. is the pioneer in the manufacture of microprocessor for computers. On 4/1/2016, Intel issued...

Intel Inc. is the pioneer in the manufacture of microprocessor for computers. On 4/1/2016, Intel issued $800,000 of 12% face value bonds for $851,705.70. The bonds are due in 4 years, and pay interest semiannually on September 30 and March 31. Intel sold the bonds to yield 10%.

Use the spreadsheet found in the link at the bottom to prepare a bond interest expense and premium amortization schedule using the straight-line method.

Use the attached spreadsheet to prepare a bond interest expense and premium amortization schedule using the effective interest method.

Prepare any adjusting entries for the end of the fiscal year, December 31, 2016, using the:

straight-line method of amortization

effective interest method of amortization

Assume the company retires the bonds on June 30, 2017, at 103 plus accrued interest. Prepare the journal entries to record the bond retirement using the:

straight-line method of amortization effective interest method of amortization

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Here, in the given problem we are required to prepare a worksheet showing bond interest expense and premium amortisation as per straight line method and effective interest method of amortisation.

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
Date Cash Paid Interest expense Premium Amortization Carrying Amount of Bonds
Date Cash Paid Interest expense Premium Amortization Carrying Amount of Bonds Intel Inc. is the pioneer in the manufacture of microprocessor for computers. On 4/1/2016, Intel issued $800,000 of 12% face value bonds for $851,705.70. The bonds are due in 4 years, and pay interest semiannually on September 30 and March 31. Intel sold the bonds to yield 10%. Use the spreadsheet found in the link at the bottom to prepare a bond interest expense and premium amortization schedule using...
On January 1, 2016, Knorr Corporation issued $1,100,000 of 9%, 5-year bonds dated January 1, 2016....
On January 1, 2016, Knorr Corporation issued $1,100,000 of 9%, 5-year bonds dated January 1, 2016. The bonds pay interest annually on December 31. The bonds were issued to yield 10%. Bond issue costs associated with the bonds totaled $20,058.17. Do not round answers. Required: Prepare the journal entries to record the following: January 1, 2016 Sold the bonds at an effective rate of 10% December 31, 2016 First interest payment using the effective interest method December 31, 2016 Amortization...
On January 1, 2016, Knorr Corporation issued $1,000,000 of 9%, 5-year bonds dated January 1, 2016....
On January 1, 2016, Knorr Corporation issued $1,000,000 of 9%, 5-year bonds dated January 1, 2016. The bonds pay interest annually on December 31. The bonds were issued to yield 10%. Bond issue costs associated with the bonds totaled $18,000. Required: Prepare the journal entries to record the following: January 1, 2016 Sold the bonds at an effective rate of 10% December 31, 2016 First interest payment using the effective interest method December 31, 2016 Amortization of bond issue costs...
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....
On January 1, 2018, the San Marcos Company issues, $300,000 of 8% bonds due in 10...
On January 1, 2018, the San Marcos Company issues, $300,000 of 8% bonds due in 10 years. These were issued for $280,488 to yield a 9% rate. Instructions 1. Prepare a bond interest expense and discount amortization schedule using the effective interest method for the first two years of the life of the bond. 2. Prepare a bond interest expense and discount amortization schedule assuming the company followed the straight-line method of discount amortization first two years of the life...
Bond Discount, Entries for Bonds Payable Transactions On July 1, 2016, Brower Industries Inc. issued $5,500,000...
Bond Discount, Entries for Bonds Payable Transactions On July 1, 2016, Brower Industries Inc. issued $5,500,000 of 7-year, 11% bonds at a market (effective) interest rate of 12%, receiving cash of $5,244,387. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 2016. For a compound...
Trader Joes issues $5,000,000 of 8%, 4-year bonds dated January 1, 2013, that pay interest semiannually...
Trader Joes issues $5,000,000 of 8%, 4-year bonds dated January 1, 2013, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of 5,030,00 Prepare the January 1, 2013, journal entry to record the issuance. For each semiannual period, compute the cash payment, the straight-line premium or discount amortization the bond interest expense Cash proceeds= Cash proceeds= Bonds interest expense= cash interest paid + bond discount Bonds interest expense= Bonds interest expense= Bonds...
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,...
Campbell Inc. produces and sells outdoor equipment. On July 1, Year 1, Campbell Inc. issued $21,000,000...
Campbell Inc. produces and sells outdoor equipment. On July 1, Year 1, Campbell Inc. issued $21,000,000 of 10-year, 13% bonds at a market (effective) interest rate of 12%, receiving cash of $22,204,241. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1.* 2. Journalize...
Hillside issues $1,200,000 of 8%, 15-year bonds dated January 1, 2016, that pay interest semiannually on...
Hillside issues $1,200,000 of 8%, 15-year bonds dated January 1, 2016, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,036,935. Required: 1. Prepare the January 1, 2016, journal entry to record the bonds’ issuance. 2. (a) For each semiannual period, complete the table below to calculate the cash payment. 2. (b) For each semiannual period, complete the table below to calculate the straight-line discount amortization. 2. (c) For each semiannual...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT