On March 1, 2002, ABC Co. issued P700,000 of 10% bonds to yield 8%. Interest is payable semiannually on February 28 and August 31. The bonds mature in 10 years. ◦Requirements: ◦A. Determine the issue price of the bonds. ◦B. Prepare an amortization table through the first 2 interest periods using the effective interest method.
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- On January 1, 2024, Reyes Recreational Products issued $200,000, 12%, four-year bonds. Interest is paid semiannually on June 30 and December 31. The bonds were issued at $188,058 to yield an annual return of 14%. 1. Prepare an amortization schedule that determines interest at the effective interest rate. 2. Prepare an amortization schedule by the straight-line method. 3. Assuming the market rate is still 14%, what price would a second investor pay the first investor on June 30, 2026, for $28,000 of the bonds?On January 1, Year 1, Kennard Co. issued $2,000,000, 5%, 10-year bonds, with interest payable on June 30 and December 31 to yield 6%. The bonds were issued for $1,851,234. a. Prepare an amortization schedule for Year 1 and Year 2 using the effective interest rate method. Round answers to the nearest dollar. Enter all amounts as positive numbers. Amortization Table The Effective Interest Rate Method Interest Paid Interest Expense Amortization Bond Carrying Amount Date 1/1/Year 1 6/30/Year 1 12/31/Year 1 6/30/Year 2 12/31/Year 2 b. Show how this bond would be reported on the balance sheet at December 31, Year 2. Kennard Co. Partial Balance SheetOn December 31, 2018, when the market interest rate is 10%, Willis Realty issues $1,000,000 of 11.25%, 10-year bonds payable. The bonds pay interest semiannually. Willis Realty received $1,077,988 in cash at issuance. Requirements 1. Prepare an amortization table using the effective interest amortization method for the first two semiannual interest periods. (Round to the nearest dollar.) 2. Using the amortization table prepared in Requirement 1, journalize issuance of the bonds and the first two interest payments. Requirement 1. Prepare an amortization table using the effective interest amortization method for the first two semiannual interest periods. (Round to the nearest dollar.) Interest Carrying Cash Paid Expense Amortized Amount 12/31/2018 06/30/2019 12/31/2019 Requirement 2. Using the amortization table prepared in Requirement 1, journalize issuance of the bonds and the first two interest payments. (Record debits first, then credits. Select explanations on the last line of the…
- On January 1, 2018, Bradley Recreational Products issued $100,000, 9%, four-year bonds. Interest is paid semiannually on June 30 and December 31. The bonds were issued at $96,768 to yield an annual return of 10%.Required:1. Prepare an amortization schedule that determines interest at the effective interest rate.2. Prepare an amortization schedule by the straight-line method.3. Prepare the journal entries to record interest expense on June 30, 2020, by each of the two approaches.4. Explain why the pattern of interest differs between the two methods.5. Assuming the market rate is still 10%, what price would a second investor pay the first investor on June 30,2020, for $10,000 of the bonds?On January 1, Shanghai Fashions issued $325,000 of 6%, 3-year bonds when the market rate of interest was 10%. The bonds pay interest semiannually on June 30 and December 31. A. How much are the proceeds that Shanghai Fashions Company will receive on the issue date of the bonds? B. Prepare an amortization table for the bond issue. C. If the bonds are retired at the end of Year 2 at 104.5% of the maturity value, how much gain or loss on retirement will be reported?Renfro Company issued $300,000 of 8%, 10-year bonds at 102. Interest is paid annually, and the straight-line method is used for amortization. Assume that the market rate for similar investments is 7%. The bonds are issued on the date of the bonds. a. What amount was received for the bonds? b. How much interest is paid each interest period? c. What is the premium amortization for the first interest period?
- On January 2, Year 1, Kampai Sushi Bar sold $800,000 of bonds for $785,000. The bonds will mature in 10 years and pay interest annually on December 31. The company properly recorded the payment of interest and the amortization of the discount using the effective interest method. What will be the carrying value of the bonds at the end of Year 1? a.$800,000 b.less than $785,000 c.$785,000 d.greater than $785,000, but less than $800,000On January 1, 2024, Christmas Anytime issues $850,000 of 6% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. Assume that the market interest rate is 7% and the bonds issue at a discount.2a. Calculate the issue price of a bond.2b. Complete the first three rows of an amortization schedule. (FV of $1, PV of $1, FVA of $1, and PVA of $1)3. On 1/1/21, Your Company issued $250,000 of 6% bonds, dated 1/1/21. The bonds pay interest annually on December 31st. The yield is 8%. They mature in three years on 12/31/23. The bonds were issued for $237,115. Be sure to show the date of each journal entry. The 'right' journal entry on the 'wrong' date is wrong. а. Prepare an amortization table Prepare thejournal entry for 1/1/21 Prepare thejournal entry for 12/31/21 b. с. Amortization table: CV 8% Interest Payment Amortization Discount CV 12/31/20 12/31/21 12/31/22 Journal entries: Debits Credits 1/1/21 12/31/21
- On January 1, Year 1, Kenneth Cole Inc. issued $2,000,000, 5%, 10-year bonds, with interest payable on June 30, and December 31 to yield 6%. The bonds were issued for $1,851,234. : Given the above information, Prepare the amortization schedule for Year 1 and Year 2 using the effective interest rate method. Use the following format and round figures to nearest dollar. Date Cash Paid Interest Exp Amortization Bond Carrying ValueDiana Inc. issued $100,000 of its 9%, 5-year bonds for $96,149 when the market rate was 10%. The bonds pay interest semi-annually. Prepare an amortization table for the first three payments. PLEASE NOTE: All whole dollar amounts will be with "$" and commas as needed (i.e. $12,345). Semiannual Interest Period Semiannual Interest Expense Semiannual Interest Payment Amortization of Discount Ending Carrying Value 1 2 3On July 1, 2018, Volunteer Inc. issued bonds with a $500,000 face value at 108.0 and the 5-year bonds have a 10% interest rate in a market with a rate of 8%. Interest is payable annually and the effective-interest method is used for amortization. Prepare journal entries for the following transactions.