Question

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 interest expense=

Unamortized premium or discount, and bond carrying value

Determine the total bond interest expense to be recognized over the bonds’ life.

Prepare an amortization table using the straight-line method.

Prepare the journal entries to record all the interest payments.

Record the journal entry to record the payback of the bond at maturity

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
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...
Hillside issues $2,500,000 of 6%, 15-year bonds dated January 1, 2015, that pay interest semiannually on...
Hillside issues $2,500,000 of 6%, 15-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,059,990. Required: 1. Prepare the January 1, 2015, 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 premium amortization. (Round "Unamortized Premium" to whole dollar and...
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....
Quatro Co. issues bonds dated January 1, 2017, with a par value of $830,000. The bonds’...
Quatro Co. issues bonds dated January 1, 2017, with a par value of $830,000. The bonds’ annual contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 8%, and the bonds are sold for $851,741.    1. What is the amount of the premium on these bonds at issuance? 2. How much total bond interest expense will be recognized...
Quatro Co. issues bonds dated January 1, 2018, with a par value of $730,000. The bonds’...
Quatro Co. issues bonds dated January 1, 2018, with a par value of $730,000. The bonds’ annual contract rate is 12%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $767,042. 1. What is the amount of the premium on these bonds at issuance? 2. How much total bond interest expense will be recognized over...
On January 1, a company issues bonds dated January 1 with a par value of $280,000....
On January 1, a company issues bonds dated January 1 with a par value of $280,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $291,365. The journal entry to record the first interest payment using straight-line amortization is: (Rounded to the nearest dollar.) Multiple Choice Debit Interest Payable $12,600; credit Cash $12,600. Debit Bond Interest...
Coates Inc. issues $3 million,5-year,10% bonds at 102, with interest payable on July 1 and January...
Coates Inc. issues $3 million,5-year,10% bonds at 102, with interest payable on July 1 and January 1. The straight-line method is used to amortize bond premium. (a) Prepare the journal entry to record the sale of these bonds on January 1,2010. (b) Prepare the journal entry to record interest expense and bond premium amortization on July 1,2010, assuming no previous accrual of interest. Put the process.
Quatro Co. issues bonds dated January 1, 2019, with a par value of $830,000. The bonds’...
Quatro Co. issues bonds dated January 1, 2019, with a par value of $830,000. The bonds’ annual contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 8%, and the bonds are sold for $851,741. 1. What is the amount of the premium on these bonds at issuance? 2. How much total bond interest expense will be recognized over...
On January 1, a company issues bonds dated January 1 with a par value of $710,000....
On January 1, a company issues bonds dated January 1 with a par value of $710,000. The bonds mature in 3 years. The contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds are sold for $698,000. The journal entry to record the first interest payment using straight-line amortization is: Multiple Choice Debit Interest Expense $30,400; credit Discount on Bonds Payable $2,000; credit Cash $28,400. Debit Interest Expense $28,400; credit Premium on Bonds...
On January 1, a company issues bonds dated January 1 with a par value of $700,000....
On January 1, a company issues bonds dated January 1 with a par value of $700,000. The bonds mature in 3 years. The contract rate is 10%, and interest is paid semiannually on June 30 and December 31. The bonds are sold for $682,000. The journal entry to record the first interest payment using straight-line amortization is: Multiple Choice Debit Interest Expense $35,000; credit Premium on Bonds Payable $3,000; credit Cash $32,000. Debit Interest Expense $38,000; credit Discount on Bonds...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT