Prepare the necessary journal entries to record the following transactions relating to the long-term issuance of bonds of Ayayai Corp. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) March 1 Issued $5,200,000 face value Ayayai Corp. second mortgage, 8% bonds for $5,669,040, including accrued interest. Interest is payable semiannually on December 1 and June 1 with the bonds maturing 10 years from this past December 1. The bonds are callable at 102. June 1 Paid semiannual interest on Ayayai Corp. bonds. (Use straight-line amortization of any premium or discount.) December 1 Paid semiannual interest on Ayayai Corp. bonds and purchased $2,600,000 face value bonds at the call price in accordance with the provisions of the bond indenture.

Prepare the necessary journal entries to record the following transactions relating to the long-term issuance of bonds of Ayayai Corp. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) March 1 Issued $5,200,000 face value Ayayai Corp. second mortgage, 8% bonds for $5,669,040, including accrued interest. Interest is payable semiannually on December 1 and June 1 with the bonds maturing 10 years from this past December 1. The bonds are callable at 102. June 1 Paid semiannual interest on Ayayai Corp. bonds. (Use straight-line amortization of any premium or discount.) December 1 Paid semiannual interest on Ayayai Corp. bonds and purchased $2,600,000 face value bonds at the call price in accordance with the provisions of the bond indenture.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Brief Exercise 10-09 Oriole Company issues $325,000, 20-year, 7% bonds at 103. Prepare the journal entry to record the sale of these bonds on June 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Enter an account title enter a debit amount enter a credit amount Enter an account title enter a debit amount enter a credit amount Enter an account title enter a debit amount enter a credit amount
W On January 1, 2023, Liu Corporation paid $262,123 to acquire bonds of Singh Investment Corp with a par value of $260,000. The annual contract rate on the bonds is 6.0% and interest is paid semiannually on June 30 and December 31. The bonds mature after three years. The market rate of interest was 5.7%. Liu Corporation intends to hold the bonds until maturity. Required: 1. Prepare an amortization schedule for the investment showing only 2023. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. Enter all the amounts as positive values.) Period Ending Jan. 1/23 June 30/23 Dec. 31/23 Cash Interest Received View transaction list
Knowledge Check 01 On January 1, Duffy Enterprises issued $100,000 in bonds that mature in 10 years. The bonds were issued at face value. The bonds have a stated interest rate of 8% and pay interest once per year on December 31. Prepare the appropriate journal entry to record the issuance of the bonds. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) - View transaction list View journal entry worksheet No 1 Transaction A Gain on Bond Retirement Interest Expense General Journal Debit 104,000 Credit 8,000 Ⓒ
Brief Exercise 10-08 Metlock, Inc. issues $264,000, 10-year, 10% bonds at 99. Prepare the journal entry to record the sale of these bonds on March 1, 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Enter an account title enter a debit amount enter a credit amount Enter an account title enter a debit amount enter a credit amount Enter an account title enter a debit amount enter a credit amount
The Gonzalez Group issued $900,000 of 11% bonds on June 30, 2024, for $977,220. • The bonds were dated on June 30 and mature on June 30, 2044 (20 years). • The market yield for bonds of similar risk and maturity is 10%. • Interest is paid semiannually on December 31 and June 30. Required: 1. to 3. Prepare the journal entries to record their issuance by The Gonzalez Group on June 30, 2024, Interest on Dec and interest on June 30, 2025 (at the effective rate). Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 3 < 1 2 Record the issuance of the bond on June 30, 2024. Note: Enter debits before credits. Date June 30, 2024 Cash General Journali Bonds payable Premium on bonds payable Debit 977,220 Credit 900,000 77,220 Prev D 3 of 11 www www Next
On January 1, 2021, Madison Products issued $70 million of 6%, 10-year convertible bonds at a net price of $70.9 million. Madison recently issued similar, but nonconvertible, bonds at 99 (that is, 99% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of Madison's no par common stock. Madison records interest by the straight-line method. On June 1, 2023, Madison notified bondholders of its intent to call the bonds at face value plus a 1% call premium on July 1, 2023. By June 30 all bondholders had chosen to convert their bonds into shares as of the interest payment date. On June 30, Madison paid the semiannual interest and issued the requisite number of shares for the bonds being converted. In this question, combine the discount on the bonds with the face amount, and record the net amount as bonds payable. This is the "net method." When the net method is used, the discount (or premium) is amortized directly to the bonds…
Instructions Present Value Tables Chart of Accounts Journal Final Questions Instructions Campbell Inc. produces and sells outdoor equipment. On July 1, Year 1, Campbell Inc. issued $60,400,000 of 10-year, 12% bonds at a market (effective) interest rate of 11%, receiving cash of $64,009,069. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1.* 2. Journalize the entries to record the following:* a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) 3. Determine the total interest expense for Year 1. 4. Will the bond proceeds always be…
Wookie Company issues 7%, five-year bonds, on January 1 of this year, with a par value of $101,000 and semiannual interest payments. Semiannual Period-End Carrying Value $ 109, 131 108,318 107,505 Unamortized Premium $ 8,131 7,318 6,505 (0) January 1, issuance (1) June 30, first payment (2) December 31, second payment Use the above straight-line bond amortization table and prepare journal entries for the following. (a) The issuance of bonds on January 1. (b) The first interest payment on June 30. (c) The second interest payment on December 31. View transaction list
Period Cash Paid Interest Expense Interest in Carrying Value Carrying Value Issue Date $85,940 1 $4,100 $ 3,438 $662 85,278 2 4,100 3,411 689 84,589 1. & 2. Record the bond issue assuming the face value of bonds payable is $79,000 and first interest payment. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) Record the bond issue. Event General Journal Debit Credit 1 Record the first interest payment. Event General Journal Debit Credit 2
a. Depreciation on the company's wind turbine equipment for the year is $6,100. b. The Prepaid Insurance account for the solar panels had a $3,100 debit balance at December 31 before adjusting for the costs of any expired coverage. Analysis of prepaid insurance shows that $1,150 of unexpired insurance coverage remains at year-end. c. The company received $6,300 cash in advance for sustainability consulting work. As of December 31, one-third of the sustainability consulting work had been performed. d. As of December 31, $2,300 in wages expense for the organic produce workers has been incurred but not yet paid. e. As of December 31, the company has earned, but not yet recorded, $510 of interest revenue from investments in socially responsible bonds. The interest revenue is expected to be received on January 12. For each of the above separate cases, prepare the required December 31 year-end adjusting entries.
On January 1, 2021, Madison Products issued $70 million of 6%, 10-year convertible bonds at a net price of $70.9 million. Madison recently issued similar, but nonconvertible, bonds at 99 (that is, 99% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of Madison's no par common stock. Madison records interest by the straight-line method. On June 1, 2023, Madison notified bondholders of its intent to call the bonds at face value plus a 1% call premium on July 1, 2023. By June 30 all bondholders had chosen to convert their bonds into shares as of the interest payment date. On June 30, Madison paid the semiannual interest and issued the requisite number of shares for the bonds being converted. In this question, combine the discount on the bonds with the face amount, and record the net amount as bonds payable. This is the "net method." When the net method is used, the discount (or premium) is amortized directly to the bonds…
Current Attempt in Progress The following information relates to the debt securities investments of Sheffield Company. 1. 2. 3. 4. 5. 6. 7. No. Prepare any journal entries you consider necessary, including year-end entries (December 31), assuming these are available-for-sale securities. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) (1) On February 1, the company purchased 11% bonds of Gibbons Co. having a par value of $318,000 at 100 plus accrued interest. Interest is payable April 1 and October 1. On April 1, semiannual interest is received. On July 1, 9% bonds of Sampson, Inc. were purchased. These bonds with a par value of $219,600 were purchased at 100 plus accrued interest. Interest dates are June 1 and December 1. (2) On September 1, bonds with a par value of $55,200, purchased on February…