KC Corporation issued bonds with a total par value of $100,000 on 1/1/20x1. The following loan amortization schedule was developed for these bonds... Year 20x1 20x2 20x3 20x4 Column Totals Beginning Carrying Value 96,613 97,376 98,192 99,065 Interest 6,763 6,816 6,873 6,935 27,387 Cash 6,000 6,000 6,000 6,000 24,000 Amortization 763 816 873 935 3,387 Based upon the above information, Assume the bonds are refunded on January 1, 20x4. The new issue has a market value of 104. Make the required journal entry to record the refunding. (You do not have to record interest expense or interest payable.)

KC Corporation issued bonds with a total par value of $100,000 on 1/1/20x1. The following loan amortization schedule was developed for these bonds... Year 20x1 20x2 20x3 20x4 Column Totals Beginning Carrying Value 96,613 97,376 98,192 99,065 Interest 6,763 6,816 6,873 6,935 27,387 Cash 6,000 6,000 6,000 6,000 24,000 Amortization 763 816 873 935 3,387 Based upon the above information, Assume the bonds are refunded on January 1, 20x4. The new issue has a market value of 104. Make the required journal entry to record the refunding. (You do not have to record interest expense or interest payable.)

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter7: Financial Activities

Section: Chapter Questions

Problem 11QE

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KC Corporation issued bonds with a total par value of $100,000 on 1/1/20x1. The following loan amortization schedule was developed for these bonds:. Year 20x1 20x2 20x3 20x4 Column Totals Beginning Carrying Value 96,613 97,376 98,192 99,065 Interest 6,763 6,816 6,873 6,935 27,387 Cash 6,000 6,000 6,000 6,000 24,000 Amortization 763 816 873 935 3,387 Based upon the above information, Assume instead of refunding the bonds on January 1, 20X4, that the company is unable to make the payment for the maturity value and for the final interest payment at the end of the bond term. Investors agree to accept instead, a four year non-interest bearing note for 103,000. Record the troubled. debt restructure on the books of the debtor
KC Corporation issued bonds with a total par value of $100,000 on 1/1/20x1. The following loan amortization schedule was developed for these bonds:. Year 20x1 20x2 20x3 20x4 Column Totals Beginning Carrying Value 96,613 97,376 98,192 99,065 Interest 6,763 6,816 6,873 6,935 27,387 Cash 6,000 6,000 6,000 6,000 24,000 Amortization 763 816 873 935 3,387 Based upon the above information, What is the effective (market) rate of interest? SHOW CALCULATIONS
The following data relate to a $2,000,000, 8% bond issued for a selected semiannual interest period: Bond carrying amount at beginning of period $2,125,000Interest paid during period 160,000 Interest expense allocable to the period 148,750 (a) Were the bonds issued at a discount or at a premium? (b) What is the unamortized amount of the discount or premium account at the beginningof the period? (c) What account was debited to amortize the discount or premium?
Present entries to record the selected transactions described below: a. Issued $2,750,000 of 10-year, 8% bonds at 97. If an amount box does not require an entry, leave it blank. b. Amortized bond discount for a full year, using the straight-line method. If an amount box does not require an entry, leave it blank. c. Called bonds at 98. Assume the bonds were carried at $2,692,250 at the time of the redemption. If an amount box does not require an entry, leave it blank.
Assume bonds payable are amortized using the straight-line amortization method unless stated otherwise. Pricing bonds Bond prices depend on the market rate of interest, stated rate of interest and time. Requirements Compute the price of the following 8% bonds of Country Telecom. a. $100,000 issued at 75.25 $100,000 issued at 94.50 b. $100,000 issued at 103 50 c. $100,000 issued at 94.50 d. $100,000 issued at 103.25 2. Which bond will Country Telecom have to pay the most to retire at maturity? Explain your answer.
Koby Company issued $300,000 of bonds for $325,000. a. Determine the financial statement effect of the issuance of the bonds. TIP: if a category is not affected by the bond issuance, enter 0 or leave the field blank. If the transaction affects two accounts in the same category, enter the largest amount in the first row. Transaction Bond Issuance Assets 325,000 ✓= 050 Current assets Long-term liabilities Bonds payable Balance Sheet CHINI Stockholders' Liabilities + Equity 300,000 300,000 x x * 325,000 x x 300,000 x $ 0✔ 0✔ Revenue b. Illustrate how the bonds will be shown on the Koby Company's balance sheet at the issuance date. 25,000 x Income Statement 0 ✓- 0✔ Expenses Net Income 0✔ 0✔
Assume bonds payable are amortized using the straight-line amortization method unless stated otherwise. Pricing bonds Bond prices depend on the market rate of interest, stated rate of interest and time. Requirements Compute the price of the following 8% bonds of Country Telecom. $100,000 issued at 75.25 $100,000 issued at 94.50 $100,000 issued at 103 50 $100,000 issued at 94.50 $100,000 issued at 103.25 2. Which bond will Country Telecom have to pay the most to retire at maturity? Explain your answer.
(E7-39) Bonds Payable: On January 1, 20X7 – Arbor Corporation issued $800,000 of 20-year, 11% bonds for $739,814.81, yielding a market (yield) rate of 12%. Interest is payable semiannually on June 30th and December 31. Confirm the bond issue price. Indicate the financial statement effects using the template for (1) bond issuance, (2) semiannual interest payable and discount amortization on June 30, 20X7, and (3) semiannual interest payment and discount amortization on December 31, 20X7.
1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1. 2a. Journalize the entry to record the first semiannual interest payment on December 31, 20Y1, and the amortization of the bond premium, using the straight-line method.Compute the price of $42,601,480 received for the bonds by using the present value tables
Required Compute the cash proceeds from bond issues under the following terms. For each case, indicate whether the bonds sold at a premium or discount. (Round your answers to nearest dollar amount.) Cash Discount or Proceeds Premium а. Pear, Inc. issued $168,000 of 10-year, 8 percent bonds at 102. b. Apple, Inc. issued $139,000 of five-year, 12 percent bonds at 97. С. Cherry Co. issued $159,000 of five-year, 6 percent bonds at 102 1/4. d. Grape, Inc. issued $70,000 of four-year, 8 percent bonds at 98.00.
On January 1, Pina Inc. issued $101050000, 9% bonds at 103. The journal entry to record the issuance of the bonds will include O a credit to Bonds Payable for $104081500. a credit to Interest Expense for $3031500. O a credit to Premium on Bonds Payable for $3031500. O a debit to Cash for $101050000.
Devin Company computes the following bond interest amortization table for bonds issued on January 1, 2021. Use the information on this table to answer the questions below. Interest Cash Payment Payment Interest Decrease in Вook Date Amount Discount Value Expense $441,068 $444,310 $447,683 $451,190 $454,838 $458,631 $462,577 $466,680 $470,947 $475,385 Discount $360,000 $360,000 $360,000 $360,000 $360,000 $360,000 $360,000 $360,000 $360,000 $360,000 $81,068 $84,310 $87,683 $91,190 $94,838 $98,631 $102,577 $106,680 $110,947 $115,385 $892,240 $807,929 $720,247 $629,056 $534,219 $435,587 $333,011 $226,331 $115,385 $0 $11,107,760 $11,192,071 $11,279,753 $11,370,944 $11,465,781 $11,564,413 $11,666,989 $11,773,669 $11,884,615 $12,000,000 June 30, 2021 Dec 31, 2021 June 30, 2022 Dec 31, 2022 June 30, 2023 Dec 31, 2023 June 30, 2024 Dec 31, 2024 June 30, 2025 Dec 31, 2025