Question

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 31, 2017 and January 1, 2018, related to the bond issue.(including explanations).

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
On January 1, 2020, Woodson Corporation issued $800,000, 6%, 5-year bonds for $735,110. The bonds were...
On January 1, 2020, Woodson 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 semiannually on July 1 and January 1. The company uses the effective-interest method of amortization. Instructions: Prepare the journal entries that Woodson Corporation would make on January 1, June 30, December 31, 2020, January 1, 2021 related to the bond issue. (b) Prepare the journal entries as of January 1, 2021 assuming the...
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, 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...
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, 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.
issued 11% bonds, dated January 1, with a face amount of $800,000 on January 1, 2009....
issued 11% bonds, dated January 1, with a face amount of $800,000 on January 1, 2009. The bonds sold for $739,815 and mature in 2028 (20 years). For bonds of similar risk and maturity, the market yield was 12%. Interest is paid semiannually on June 30 and December 31. The company uses the effective interest method of amortization and has a calendar year end.   Instructions: Prepare the journal entries that Federal Semiconductors would make on January 1, June 30, December...
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...
On June 1, 2019 Adelphi Corporation issued $415,000 of 6%, 5-year bonds.  The bonds which were issued...
On June 1, 2019 Adelphi Corporation issued $415,000 of 6%, 5-year bonds.  The bonds which were issued at 105, pay interest on January 1 and June 1. Use this information to calculate the amount of bond discount or premium that is amortized with each interest payment. If this is discount amortization enter as a positive number. If this is premium amortization enter as a negative number. Your answer: On December 31, 2018, Adelphi Corporation has outstanding 1,000 shares of $100 par...
On January 1, 2015, Jørgensen Inc. in Copenhagen, Denmark, issued kr. 800,000 of five-year, 4% bonds...
On January 1, 2015, Jørgensen Inc. in Copenhagen, Denmark, issued kr. 800,000 of five-year, 4% bonds to yield a market interest rate of 5%, which resulted in a discount price of 95.62. Interest is paid semi-annually on January 1 and July 1. (Currency in Danish kroner, kr.) Instructions: Work out a complete amortization schedule on the bonds. (30%) Prepare the journal entries to record the following: (20%) The issuance of the bonds on January 1, 2015 The payment of interest...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT