Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 14, Problem 9RE
To determine
Prepare
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Record the issue of the bonds on July 31,2024. (List debit entry before credit entry.
Record the payment of interest on January 31, 2025, assuming the semi-annual amortization amount for this interest period is \$895. (list all debit entries before credit entries
Please answer all three requirements without image format answer thanku
(b) Prepare an effective-interest amortization table for the first eight interest payments for these bonds.
(c) The Bonds were redeemed on January 1, 2026 (after the interest had been paid and recorded) at 102. Prepare the journal entry for the redemption of the bonds.
The following amortization and interest schedule reflects the issuance of 10-year bonds by Wildhorse Corporation on January 1,
2019, and the subsequent interest payments and charges. The company's year-end is December 31, and financial statements are
prepared once yearly.
Year
1/1/2019
2020
2019 $12,500 $13,305
12,500
13,401
13,510
13,631
13,767
13,919
2021
2024
2025
2022 12,500
2023 12,500
12,500
12,500
12,500 14,280
12,500
14,493
14,731
2026
Amortization Schedule
2027
Cash Interest
2028
12,500
12,500
14,089
Amount
Unamortized
$14,126
13,321
12,420
11,410
10,279
9,012
7,593
6,004
4,224
2,231
Carrying
Value
$ 110,874
111,679
112,580
113,590
114,721
115,988
117,407
118,996
120,776
122,769
125,000
Click here to view factor tables.
a. Indicate whether the bonds were issued at a premium or a discount.
Chapter 14 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 14 - Prob. 1GICh. 14 - Why does issuing debt result in an income tax...Ch. 14 - At the beginning of 2018, corporate tax rates...Ch. 14 - What is a bond? Define face value, maturity date,...Ch. 14 - What is the difference between a mortgage bond and...Ch. 14 - Prob. 6GICh. 14 - Prob. 7GICh. 14 - Prob. 8GICh. 14 - Prob. 9GICh. 14 - Prob. 10GI
Ch. 14 - Prob. 11GICh. 14 - Prob. 12GICh. 14 - Prob. 13GICh. 14 - Prob. 14GICh. 14 - What is a call provision? Why do companies often...Ch. 14 - Prob. 16GICh. 14 - When do companies recognize gains and losses from...Ch. 14 - Prob. 18GICh. 14 - Prob. 19GICh. 14 - Prob. 20GICh. 14 - Prob. 21GICh. 14 - Prob. 22GICh. 14 - Prob. 23GICh. 14 - Prob. 24GICh. 14 - Prob. 25GICh. 14 - Prob. 26GICh. 14 - Prob. 27GICh. 14 - Prob. 28GICh. 14 - On January 1, 2019, Bay Company issues bonds with...Ch. 14 - Prob. 2MCCh. 14 - Prob. 3MCCh. 14 - Prob. 4MCCh. 14 - Prob. 5MCCh. 14 - Prob. 6MCCh. 14 - Prob. 7MCCh. 14 - When the cash proceeds from a bond issued with...Ch. 14 - On December 31, 2019, Dare Corporation had...Ch. 14 - Prob. 10MCCh. 14 - On January 1, 2019, Onslow Company borrowed...Ch. 14 - (Appendix 14.1)Pamlico Company has a 500,000, 15%,...Ch. 14 - Prob. 1RECh. 14 - Refer to the information in RE14-1. Assume Canglon...Ch. 14 - Prob. 3RECh. 14 - Prob. 4RECh. 14 - Prob. 5RECh. 14 - Prob. 6RECh. 14 - Prob. 7RECh. 14 - Prob. 8RECh. 14 - Prob. 9RECh. 14 - Prob. 10RECh. 14 - On January 1, 2019, Langdon Co. issues bonds with...Ch. 14 - Nolan Corporation has outstanding convertible...Ch. 14 - On January 1, 2019, Branson Corporation issued...Ch. 14 - On January 1, 2019, Boater Company issues a 20,000...Ch. 14 - On January 2, 2019, Jennings Company purchases...Ch. 14 - Determining the Proceeds from Bond Issues Madison...Ch. 14 - Prob. 2ECh. 14 - Prob. 3ECh. 14 - On January 1, 2019, Knorr Corporation issued...Ch. 14 - On January 1, 2019, Hackman Corporation issued 1...Ch. 14 - Prob. 6ECh. 14 - Chowan Corporation issued 100,000 of 10% bonds...Ch. 14 - Prob. 8ECh. 14 - Taylor Company issued 100,000 of 13% bonds on...Ch. 14 - On January 1, 2019, Calvert Company issues 12%,...Ch. 14 - Prob. 11ECh. 14 - On October 1, 2019, Ball Company issued 9% bonds...Ch. 14 - Prob. 13ECh. 14 - Prob. 14ECh. 14 - On December 1, 2017, Cone Company issued its 10%,...Ch. 14 - Prob. 16ECh. 14 - Prob. 17ECh. 14 - On July 1, 2020, Tuttle Company had bonds payable...Ch. 14 - On January 1, 2019, Conroe Corporation sold...Ch. 14 - Prob. 20ECh. 14 - On July 2, 2018, McGraw Corporation issued 500,000...Ch. 14 - Prob. 22ECh. 14 - January 1, 2019, Johnson Corporation issued a...Ch. 14 - Spath Company borrows 75,000 by issuing a 4-year,...Ch. 14 - Webb Corporation purchased an asset from Shaw...Ch. 14 - On January 1, 2019, Sanders Corporation purchased...Ch. 14 - On January 1, 2019, Billips Corporation purchased...Ch. 14 - On January 1, 2019, Northfield Corporation becomes...Ch. 14 - Prob. 29ECh. 14 - Prob. 30ECh. 14 - Prob. 31ECh. 14 - Prob. 1PCh. 14 - Prob. 2PCh. 14 - Prob. 3PCh. 14 - Prob. 4PCh. 14 - Bats Corporation issued 800,000 of 12% face value...Ch. 14 - Prob. 6PCh. 14 - Wilbury Corporation issued 1 million of 13.5%...Ch. 14 - Prob. 8PCh. 14 - Prob. 9PCh. 14 - Prob. 10PCh. 14 - Prob. 11PCh. 14 - Hamlet Corporation purchases computer equipment at...Ch. 14 - Prob. 13PCh. 14 - Restructuring (Debtor) Oakwood Corporation is...Ch. 14 - Prob. 15PCh. 14 - Tenth National Bank has a 200,000, 12% note...Ch. 14 - Prob. 1CCh. 14 - One way for a corporation to accomplish long-term...Ch. 14 - Prob. 3CCh. 14 - Recording Convertible Debt Zakin Co. recently...Ch. 14 - Prob. 5CCh. 14 - Long-Term Notes Payable Business transactions...Ch. 14 - Prob. 7CCh. 14 - On January 1, 2019, Brewster Company issued 2,000...Ch. 14 - Prob. 9CCh. 14 - You are an accountant for Taos Company, which has...Ch. 14 - Prob. 11CCh. 14 - Prob. 12CCh. 14 - Prob. 13C
Knowledge Booster
Similar questions
- The following amortization and interest schedule reflects the issuance of 10 year bonds by CMA Corporation on January 1, 2019, and the subsequent interest payment and charges. The Company’s year end is December 31, and the financial statements are prepared once yearly. Instructions:(a) Indicate whether the bonds were issued at a premium or discount and how you can determine this fact from the schedule.(b) Indicate whether the amortization schedule is based on the straight line method or the effective interest method and how you can determine which method is used.(c) Determine the stated interest rate and the effective interest rate.(d) On the basis of schedule above, prepare the journal entry to record the issuance of bonds on January 1, 2019(e) On the basis of the schedule above, prepare the journal entry or entries to reflect the bond transactions and accruals for 2019. (Interest is paid January 1)(f) On the basis of the schedule above, prepare the journal entry or entries to…arrow_forwardOn October 1, 2019, Jenkins Corporation bought bonds with a face value of $200,000 for $199,175, which included accrued interest. The bonds are due December 31, 2021, and carry a face rate of interest of 10.5%. Interest on the bonds is payable semiannually on June 30 and December 31. Jenkins uses the straight-line method to amortize the discount. Required: 1. Prepare journal entries to record the purchase of the bonds, each interest receipt, and the retirement of the issue on December 31, 2021. 2. Next Level If Jenkins failed to separately record the interest at acquisition, explain the errors that would occur in the company’s financial statements (no calculations are required).arrow_forwardAnswer ASAP, Thank You Bryan Company issued $500,000 of 10% face value bonds on January 1, 2019, for $486,000. The bonds are due December 31, 2021, and pay interest semiannually on June 30 and December 31. Bryan uses the straight-line amortization method. Required: Prepare the journal entries to record the issuance of the bonds and the first two interest payments.arrow_forward
- McWherter Instruments sold $400 million of 6% bonds, dated January 1, on January 1, 2021. The bonds mature on December 31, 2040 (20 years). For bonds of similar risk and maturity, the market yield was 8%. Interest is paid semiannually on June 30 and December 31. Blanton Technologies, Inc., purchased $400,000 of the bonds as a long-term investment. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price of the bonds issued on January 1, 2021. 2. Prepare the journal entries to record (a) their issuance by McWherter and (b) Blanton's investment on January 1, 2021. 3. Prepare the journal entries by (a) McWherter and (b) Blanton to record interest on June 30, 2021 (at the effective rate). 4. Prepare the journal entries by (a) McWherter and (b) Blanton to record interest on December 31, 2021 (at the effective rate). Complete this question by entering your answers in the tabs below. Required 1…arrow_forwardBryan Company issued $780,000 of 8% face value bonds on January 1, 2019, for $763,800. The bonds are due December 31, 2021, and pay interest semiannually on June 30 and December 31. Bryan uses the straight-line amortization method. Required: Prepare the journal entries to record the issuance of the bonds and the first two interest payments.arrow_forwardQuestion 5. On 1 January 2021 Corgi Ltd issued a £5m convertible bond at nominal value. There were no issue costs. The bond is redeemable at par on 1 January 2024 or bond holders can convert their bond into ordinary shares, with a nominal value of £1. The terms of the conversion are 2 shares for every £100 of bond. The coupon rate on the bond is 10%, payable annually in arrears. Bonds issued by similar entities without the conversion rights bear interest at 15%.arrow_forward
- On January 1, 2019, Hackman Corporation issued $1,350,000 face value 8% bonds dated January 1, 2019, for $1,366,900. The bonds pay interest semiannually on June 30 and December 31 and are due December 31, 2023. Hackman uses the straight-line amortization method. Required: Record the issuance of the bonds and the first two interest payments.arrow_forwardOn July 01, 2019, SALUDO RAW SA'YO SI MAGELLAN SABI NI LOLA CO. received P1,032,880 for P1,000,000 face amount, 12% bonds, a price that yields 10%. Using the interest method of amortization, how much is the interest expense for the six months ended December 31, 2019? Use the same information in MC 18. What is the bond carrying value at December 31, 2019? a. P1,024,524 b. P1,031,236 c. P1,032,880 d. P1,041,236arrow_forwardRefer to the information in RE13-5. Assume that on December 31, 2019, the investment in Smith Corporation bonds has a market value of 12,500. Prepare the year-end journal entry to record the unrealized gain or loss.arrow_forward
- Refer to the information in RE14-1. Assume Canglon uses the effective interest method to amortize the discount. Prepare the journal entry to record the first interest payment on June 30, 2019.arrow_forwardBlue Corporation issued a 10 year bonds on January 1, 2019. Costs associated with the bond issuance were P1, 600,000. Blue Corporation uses the straight line method to amortize bond issue costs. Prepare the December 31, 2019 entry to record the 2019 bond issue cost amortization.arrow_forwardDonna Clark Company issued $612,000 of 9%, 20-year bonds on January 1, 2025, at 101. Interest is payable semiannually on July 1 and January 1. Clark Company uses the straight-line method of amortization for bond premium or discount. Prepare the journal entries to record the following.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning