P10-6 (Algo) Recording and Reporting Bonds Issued at a Discount LO10-4[The following information applies to the questions displayed below.]PowerTap Utilities is planning to issue bonds with a face value of $2,300,000 and a coupon rate of 7 percent. The bondsmature in 10 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1of this year. PowerTap uses the effective-interest amortization method. Assume an annual market rate of interest of 8percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1)Note: Use appropriate factor(s) from the tables provided.P10-6 Part 22. What amount of interest expense should be recorded on June 30 and December 31 of this year?Note: Round your final answers to nearest whole dollar amount.Interestexpense> Answer is complete but not entirely correct.$June 3041,988 × $December 3143,528

Bonds payable refers to a type of long-term debt that a company or organization issues to borrow…

Answered: PowerTap Utilities is planning to issue…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

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Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...

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On July 1, Somerset Inc. issued $200,000 of 10%, 10-year bonds when the market rate was 12%. The bonds paid interest semi-annually. Assuming the bonds sold at 58.55, what was the selling price of the bonds? Explain why the cash received from selling this bond is different from the $200,000 face value of the bond.
Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market rate of 4%. The bonds paid interest semi-annually on June 30 and Dec. 31. How much money did the company receive when the bonds were issued? The bonds would be quoted at what rate?
Please find 1) Interest expense 2) cash paid 3) bonds payable Required information P10-6 (Algo) Recording and Reporting Bonds Issued at a Discount LO10-4 [The following information applies to the questions displayed below.] PowerTap Utilities is planning to issue bonds with a face value of $2,100,000 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. PowerTap uses the effective-interest amortization method. Assume an annual market rate of interest of 10 percent. (FV of $1, PV of $1. FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) P10-6 Part 1 Required: 1. What was the issue price on January 1 of this year? (Round your final answers to nearest whole dollar amount.) Issue price $ 2,100,000
M10-11 (Algo) Recording the Issuance and Interest Payments of a Bond Issued at a Discount (Straight- Line Amortization with a Discount Account) LO10-4 Wefald Company sold bonds with a face value of $608,000 for $562,000. The bonds have a coupon rate of 6 percent, 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. Using a discount account, record the sale of the bonds on January 1 and the payment of interest on June 30 of this year. Wefald uses the straight-line amortization method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to nearest whole dollar amounts.) View transaction list Journal entry worksheet 1 2 Record the sale of the bonds on January 1. Note: Enter debits before credits. Date January 01 Record entry General Journal Clear entry Debit Credit View general journal >
P10-5 (Algo) Recording a Bond Issued at a Discount and Determining How the Issuance Affects Ratios LO10-3, 10-4, 10-6 [The following information applies to the questions displayed below.] On January 1 of this year, Cunningham Corporation issued bonds with a face value of $219,000 and a coupon rate of 6 percent. The bonds mature in 30 years and pay interest annually every December 31. When the bonds were sold, the annual market rate of interest was 8 percent. The company uses the effective-interest amortization method. By December 31 of this year, the annual market rate of interest had increased to 10 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) P10-5 Part 3 3. Determine whether the company's debt-to-equity ratio and times interest earned ratio increase, decrease, or stay the same when (a) the bonds are issued, and (b) interest expense is recorded and cash is paid to investors for interest. (Select "NE" if there is no…
On January 1, Nic Inc. issued $100,000 of ten-year, 10% bonds that pay interest semiannually on June 30 and 31st. The bonds are sold to yield 8%. A. Using the information provided in this problem, as well as your time value of money tables to calculate the issue price of the bond. B. Was the bond issued at a premium or a discount, explain your answer.
! Required information P10-9 (Algo) Recording and Reporting Bonds Issued at a Premium LO10-5 [The following information applies to the questions displayed below.] Cron Corporation is planning to issue bonds with a face value of $810,000 and a coupon rate of 13 percent. The bonds mature in five years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Cron uses the effective-interest amortization method. Assume an annual market rate of interest of 12 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. P10-9 Part 4 4. What is the book value of the bonds on June 30 and December 31 of this year? Note: Round your final answers to nearest whole dollar amount. Bonds payable June 30 December 31
nces E10-22 (Algo) Recording and Reporting a Bond Issued at a Premium (Straight-Line Amortization with Premium Account) LO10-5 On January 1 of this year, Kona Corporation sold bonds with a face value of $1,410,000 and a coupon rate of 7 percent. The bonds mature in four years and pay Interest semiannually every June 30 and December 31. Kona uses the straight-line amortization method and also uses a premium account. Assume an annual market rate of Interest of 4 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required: 1. & 2. Prepare the Journal entry to record the Issuance of the bonds and the Interest payment on June 30 of this year. 3. What bonds payable amount will Kona report on Its June 30 balance sheet? Complete this question by entering your answers in the tabs below. Required 1 and 2 Required 3 Prepare the journal entry to record the issuance of the bonds and the interest payment on June 30 of this year. (If no…
P10-8 (Static) (Chapter Supplement) Recording and Reporting a Bond Issued at a Discount (without Discount Account) LO10-4 [The following information applies to the questions displayed below.] Claire Corporation is planning to issue bonds with a face value of $100,000 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 $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. P10-8 Part 2 2. Provide the journal entry to record the interest payment on March 31, June 30, September 30, and December 31 of this year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final…
Required information P10-8 (Static) (Chapter Supplement) Recording and Reporting a Bond Issued at a Discount (without Discount Account) LO10-4 [The following information applies to the questions displayed below.] Claire Corporation is planning to issue bonds with a face value of $100,000 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 $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. P10-8 Part 3 3. What bonds payable amount will Claire report on this year's December 31 balance sheet? Note: Round your final answer to nearest whole dollar amount.
On January 1, 2024, Neighborhood Credit Union (NCU) issued 6%, 20-year bonds payable with face value of $700,000. The bonds pay interest on June 30 and December 31. Read the requirements Requirement 1. If the market interest rate is 5% when NCU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain. in this market, so investors will pay The 6% bonds issued when the market interest rate is 5% will be priced at They are ▼. They are to acquire them. Requirement 2. If the market interest rate is 8% when NCU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain. in this market, so investors will pay The 6% bonds issued when the market interest rate is 8% will be priced at Requirement 3. The issue price of the bonds is 99. Joumalize the bond transactions. (Assume bonds payable are amortized using the straight-line amortization method. Record debits first, them credits. Select explanations on the last line…
On January 1, 2024, Agricultural Credit Union (ACU) issued 6%, 20-year bonds payable with face value of $700,000. The bonds pay interest on June 30 and December 31. Read the requirements. Requirement 1. If the market interest rate is 5% when ACU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain. ▼. They are in this market, so investors will pay The 6% bonds issued when the market interest rate is 5% will be priced at acquire them. Requirements C 1. If the market interest rate is 5% when ACU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain. 2. If the market interest rate is 7% when ACU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain. 3. The issue price of the bonds is 99. Journalize the following bond transactions: a. Issuance of the bonds on January 1, 2024. b. c. d. Payment of interest and amortization on June 30, 2024. Payment of interest…

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