Superior Drive-Ins Ltd. borrowed money by issuing $4,500,000 of 6% bonds payable at 96.5 on July 1, 2018. The bonds are 10-year bonds and pay interest each January 1 and July 1. Requirements 1. How much cash did Superior receive when it issued the bonds payable? Journalize this transaction. 2. How much must Superior pay back at maturity? When is the maturity date? 3. How much cash interest will Superior pay each six months?
Superior Drive-Ins Ltd. borrowed money by issuing $4,500,000 of 6% bonds payable at 96.5 on July 1, 2018. The bonds are 10-year bonds and pay interest each January 1 and July 1. Requirements 1. How much cash did Superior receive when it issued the bonds payable? Journalize this transaction. 2. How much must Superior pay back at maturity? When is the maturity date? 3. How much cash interest will Superior pay each six months?
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 6PA: Aggies Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...
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Question
Superior
Drive-Ins Ltd. borrowed money by issuing
$4,500,000
of
6%
bonds payable at
96.5
on July 1,
2018.
The bonds are 10-year bonds and pay interest each January 1 and July 1.
Requirements
1.
|
How much cash did
Superior
receive when it issued the bonds payable? Journalize this transaction. |
2.
|
How much must
Superior
pay back at maturity? When is the maturity date? |
3.
|
How much cash interest will
Superior
pay each six months? |
4.
|
How much interest expense will
Superior
report each six months? Use the 2018,
and the payment of interest on January 1,
2019.
|
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