Question

Coffman Company sold bonds with a face value of $1,000,000 for $913,815. The bonds have a coupon rate of 9 percent, mature in 6 years, and pay interest semiannually every June 30 and December 31.

All of the bonds were sold on January 1 of this year. Using a
discount account, record the sale of the bonds on January 1 and the
payment of interest on June 30 of this year. Coffman uses the
effective-interest amortization method. Assume an annual market
rate of interest of 11 percent. **(If no entry is required
for a transaction/event, select "No journal entry required" in the
first account field. Round final answers to the nearest whole
dollar.)**

Journey Entry:

Record the sale of the bonds on January 1.

Record the payment of interest on June 30 using the effective-interest amortization method.

Answer #1

RKO Company sold bonds with a face value of $850,000 for
$909,701. The bonds have a coupon rate of 8 percent, mature in 10
years, and pay interest annually every December 31.
All of the bonds were sold on January 1 of this year. Using a
premium account, record the sale of the bonds on January 1 and the
payment of interest on December 31 of this year. RKO uses the
effective-interest amortization method. Assume an annual market
rate of...

Park Corporation is planning to issue bonds with a face value of
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All of the bonds were sold on January 1 of this year. Park uses the
effective-interest amortization method and does not use a discount
account. Assume an annual market rate of interest of 8.5 percent.
(FV of $1, PV of $1, FVA of $1,...

Park Corporation is planning to issue bonds with a face value of
$3,300,000 and a coupon rate of 9 percent. The bonds mature in 10
years and pay interest semiannually every June 30 and December 31.
All of the bonds were sold on January 1 of this year. Park uses the
effective-interest amortization method and also uses a premium
account. Assume an annual market rate of interest of 7.5 percent.
(FV of $1, PV of $1, FVA of $1, and...

Park Corporation is planning to issue bonds with a face value of
$2,400,000 and a coupon rate of 9 percent. The bonds mature in 10
years and pay interest semiannually every June 30 and December 31.
All of the bonds were sold on January 1 of this year. Park uses the
effective-interest amortization method and also uses a premium
account. Assume an annual market rate of interest of 7.5 percent.
(FV of $1, PV of $1, FVA of $1, and...

On January 1 of this year, Victor Corporation sold bonds with a
face value of $1,440,000 and a coupon rate of 10 percent. The bonds
mature in four years and pay interest semiannually every June 30
and December 31. Victor uses the straight-line amortization method
and does not use a premium account. Assume an annual market rate of
interest of 8.5 percent. (FV of $1, PV of $1, FVA of $1, and PVA of
$1) (Use the appropriate factor(s) from...

Claire Corporation is planning to issue bonds with a face value
of $150,000 and a coupon rate of 8 percent. The bonds mature in two
years and pay interest quarterly every March 31, June 30, September
30, and December 31. All of the bonds were sold on January 1 of
this year. Claire uses the effective-interest amortization method
and does not use a discount account. Assume an annual market rate
of interest of 12 percent. (FV of $1, PV of...

Park Corporation is planning to issue bonds with a face value of
$2,008,000 and a coupon rate of 10 percent. The bonds mature in 5
years and pay interest semiannually every June 30 and December 31.
All of the bonds were sold on January 1 of this year. Park uses the
effective-interest amortization method and does not use a premium
account. Assume an annual market rate of interest of 8.5 percent.
(FV of $1, PV of $1, FVA of $1,...

On January 1, a company issues bonds dated January 1 with a par
value of $480,000. 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 10% and the bonds are sold for $461,461. The
journal entry to record the second interest payment using the
effective interest method of amortization is:

Park Corporation is planning to issue bonds with a face value of
$2,002,000 and a coupon rate of 10 percent. The bonds mature in 5
years and pay interest semiannually every June 30 and December 31.
All of the bonds were sold on January 1 of this year. Park uses the
effective-interest amortization method and does not use a premium
account. Assume an annual market rate of interest of 8.5 percent.
(FV of $1, PV of $1, FVA of $1,...

On January 1 of this year, Clearwater Corporation sold bonds
with a face value of $751,000 and a coupon rate of 7 percent. The
bonds mature in 10 years and pay interest annually every December
31. Clearwater uses the straight-line amortization method and also
uses a discount account. Assume an annual market rate of interest
of 8 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1)
(Use the appropriate factor(s) from the tables provided.
Round...

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