Question

On June 1, 20x1, Jeff Co. issued $12,000,000 of 10% bonds to yield 12%. Interest is...

On June 1, 20x1, Jeff Co. issued $12,000,000 of 10% bonds to yield 12%. Interest is payable semiannually on May 31 and November 30. The bonds mature in 15 years. Jeff Co. is a calendar-year corporation.

       Required:

Determine the issue price of the bonds. Show computations.

Prepare an amortization table through the first two interest periods using the effective interest method.

Prepare the journal entries on

June 1, 20x1

November 30, 20x1

December 31, 20x1

May 31, 20x2

What would be the journal entry if all bonds are retired at 103 on May 1, 20x2 right after the second payment.

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
Exercise 14-14 On June 30, 2009, Sheridan Company issued 12% bonds with a par value of...
Exercise 14-14 On June 30, 2009, Sheridan Company issued 12% bonds with a par value of $840,000 due in 20 years. They were issued at 98 and were callable at 103 at any date after June 30, 2017. Because of lower interest rates and a significant change in the company’s credit rating, it was decided to call the entire issue on June 30, 2018, and to issue new bonds. New 8% bonds were sold in the amount of $1,060,000 at...
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...
Cupola Fan Corporation issued 12%, $410,000, 10-year bonds for $394,000 on June 30, 2021. Debt issue...
Cupola Fan Corporation issued 12%, $410,000, 10-year bonds for $394,000 on June 30, 2021. Debt issue costs were $1,600. Interest is paid semiannually on December 31 and June 30. One year from the issue date (July 1, 2022), the corporation exercised its call privilege and retired the bonds for $404,000. The corporation uses the straight-line method both to determine interest expense and to amortize debt issue costs. Required: 1. to 4. Prepare the journal entries to record the issuance of...
On December 1, 20x1, Land Co. issued a $100,000, 5-month, note to Castle Bank. Interest was...
On December 1, 20x1, Land Co. issued a $100,000, 5-month, note to Castle Bank. Interest was discounted at issuance at an 8% discount rate. Prepare journal entries for Land on: 1) December 1, 20x1 2) December 31, 20x1 3) May 1, 20x2 (maturity)
Notson Co. issued 12% bonds with a face value of $1,800,000 at a premium to yield...
Notson Co. issued 12% bonds with a face value of $1,800,000 at a premium to yield 10%, with interest paid on June 30 and December 31. These bonds had a carrying value of $1,872,000 on December 31, 2019. Notson uses the effective interest method of amortization. On June 30, 2020, several years before their maturity, Notson retired the bonds at 105 plus accrued interest. Direct costs associated with the bond retirement totaled $3,000. Compute: The carrying value of the bonds...
On June 30, 2012, Windsor Company issued 12% bonds with a par value of $750,000 due...
On June 30, 2012, Windsor Company issued 12% bonds with a par value of $750,000 due in 20 years. They were issued at 98 and were callable at 104 at any date after June 30, 2020. Because of lower interest rates and a significant change in the company’s credit rating, it was decided to call the entire issue on June 30, 2021, and to issue new bonds. New 8% bonds were sold in the amount of $1,020,000 at 101; they...
Stottard Company issued 675,000 of 10 % , 10 year bonds on June 1 , 2017...
Stottard Company issued 675,000 of 10 % , 10 year bonds on June 1 , 2017 , at 103. The bonds were dated June 1, and interest is payable on June 1 and December 1 of each year. Required: 1. Record the issuance of the bonds on June 1, 2017. 2. Record the interest payment on December 1, 2017. Stottard uses the straight-line method of amortization. 3. Record the interest accrual on December 31, 2017, including amortization. 4. Record the...
Cupola Fan Corporation issued 10%, $540,000, 10-year bonds for $516,000 on June 30, 2018. Debt issue...
Cupola Fan Corporation issued 10%, $540,000, 10-year bonds for $516,000 on June 30, 2018. Debt issue costs were $2,900. Interest is paid semiannually on December 31 and June 30. One year from the issue date (July 1, 2019), the corporation exercised its call privilege and retired the bonds for $520,000. The corporation uses the straight-line method both to determine interest expense and to amortize debt issue costs. Required: 1. to 4. Prepare the journal entry to record the issuance of...
Cupola Fan Corporation issued 10%, $480,000, 10-year bonds for $468,000 on June 30, 2018. Debt issue...
Cupola Fan Corporation issued 10%, $480,000, 10-year bonds for $468,000 on June 30, 2018. Debt issue costs were $2,300. Interest is paid semiannually on December 31 and June 30. One year from the issue date (July 1, 2019), the corporation exercised its call privilege and retired the bonds for $475,000. The corporation uses the straight-line method both to determine interest expense and to amortize debt issue costs. Required: 1. to 4. Prepare the journal entry to record the issuance of...
Capital Company issued $600,000, 10%, 20-year bonds on January 1, 2014, at 103. Interest is payable...
Capital Company issued $600,000, 10%, 20-year bonds on January 1, 2014, at 103. Interest is payable semiannually on July 1 and January 1. Capital uses the straight-line method of amortization and has a calendar year end. Instructions Prepare all (3) journal entries made in 2014 related to the bond issue. PLEASE show the journal entry for payment of interest
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT