Question

On January 1, 2017, Flounder Corporation issued $1,650,000 face value, 8%, 10- year bonds at $1,447,229....

On January 1, 2017, Flounder Corporation issued $1,650,000 face value, 8%, 10- year bonds at $1,447,229. This price resulted in an effective-interest rate of 10% on the bonds. Flounder uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest January 1.

Prepare an amortization table through December 31, 2019 (three interest periods) for this bond issue.

Homework Answers

Answer #1
A B C D = C - B E F G = F - E
Date Interest Payment
(Stated Rate 8%)
Interest Expense
(Effective Rate 10%)
Amortization Debit Balance in Bond Discount Credit Balance in Bonds Payable Book value of Bonds
Jan. 1, 2017 202771 1650000 1447229
Dec. 31, 2017 132000 144722.90 12722.90 190048.10 1650000 1459951.90
Dec. 31, 2018 132000 145995.19 13995.19 176052.91 1650000 1473947.09
Dec. 31, 2019 132000 147394.71 15394.71 160658.20 1650000 1489341.80

Note: Amounts rounded off to 2 decimal places.

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 1, 2020, Ivanhoe Corporation issued $2,060,000 face value, 4%, 10-year bonds at $1,900,932. This...
On January 1, 2020, Ivanhoe Corporation issued $2,060,000 face value, 4%, 10-year bonds at $1,900,932. This price resulted in an effective-interest rate of 5% on the bonds. Lock uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest on January 1. Prepare an amortization table through December 31, 2022 (three interest periods) for this bond issue. (Round answers to 0 decimal places, e.g. 15,250.) LOCK CORPORATION Bond Discount Amortization Effective-Interest Method—Annual Interest Payments Annual Interest...
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...
On June 30, 2017, Novak Company issued $4,400,000 face value of 13%, 20-year bonds at $4,731,010,...
On June 30, 2017, Novak Company issued $4,400,000 face value of 13%, 20-year bonds at $4,731,010, a yield of 12%. Novak uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31. Prepare the journal entries to record the following transactions: 1.) The issuance of bonds on June 30, 2017. 2.) The payment of interest and the amortization of the premium on December 31, 2017. 3.) The payment of interest...
On June 30, 2017, Novak Company issued $4,400,000 face value of 13%, 20-year bonds at $4,731,010,...
On June 30, 2017, Novak Company issued $4,400,000 face value of 13%, 20-year bonds at $4,731,010, a yield of 12%. Novak uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31. Prepare the journal entries to record the following transactions: (1) The issuance of the bonds on June 30, 2017. (2) The payment of interest and the amortization of the premium on December 31, 2017. (3) The payment of...
On January 1, 2019, Timber Corporation issued $800,000, 6%, 5-year bonds for $735,110. The bonds were...
On January 1, 2019, Timber Corporation issued $800,000, 6%, 5-year bonds for $735,110. The bonds were sold to yield an effective-interest rate of 8%. Interest is paid annually on January 1. The company uses the effective-interest method of amortization. Instructions: (a) Prepare a bond discount amortization schedule which shows the amortization of discount for the first two interest payment dates. (Round to the nearest dollar). (b) Prepare the journal entries that Timber Corporation would make on January 1 and December...
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...
On January 1, 2017, Powell Corporation issued $600,000, 5%, 5-year bonds dated January 1, 2017, at...
On January 1, 2017, Powell Corporation issued $600,000, 5%, 5-year bonds dated January 1, 2017, at 95. The bonds pay annual interest on January 1. The company uses the effective interest method of amortization and has a calendar year end. The market interest rate is 6%. Prepare all the journal entries that Powell Corporation would make related to this bond issue through January 1, 2018. Be sure to indicate the date on which the entries would be made. January 1,...
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...
Lassen Corporation issued ten-year term bonds on January 1, 20x7, with a face value of $800,000....
Lassen Corporation issued ten-year term bonds on January 1, 20x7, with a face value of $800,000. The face interest rate is 6 percent and interest is payable semi-annually on June 30 and December 31. The bonds were issued for $690,960 to yield an effective annual rate of 8 percent. The effective interest method of amortization is to be used. Prepare a bonds amortization table for the first three periods.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT