June 30, 2018, and December 31, 2018. Explanations are not required. P12AB-38A D

Question

June 30, 2018, and December 31, 2018. Explanations are not required. P12AB-38A Determining the present value of bonds payable and journalizing Learning Objectives 7, 8 Appendixes 12A, 12B using the effective-interest amortization method Relaxation, Inc. is authorized to issue 7%, 10-year bonds payable. On January 1, 2018, when the market interest rate is 12%, the company issues $300,000 of the bonds. The bonds pay interest semiannually Requirements 3. Jan. 1, 2018, Cash $214,035 1. How much cash did the company reccive upon issuance of the bonds payable? Round to the nearest dollar) through the first two interest payments. Round to the nearest dollar.) payments of the semiannual interest amount and amortization of the bonds on 2. Prepare an amortization table for the bond using the effective-interest method 3. Journalize the issuance of the bonds on January 1,2018, and the first and second June 30, 2018, and December 31, 2018. Explanations are not required

Explanation / Answer

Part 1

Issue price = Present value of interest received+present value of maturity received

                 = (300000*3.5%*11.4669)+(300000*0.3118)

Issue price = $ 213974

Upon issuance of the bonds payable, the company received $ 213974

Part 2

Carrying Amount

Part 3

Interest Debit $ 12838

Discount Credit $ 2338

Cash Credit $ 10000

Second Entry

Interest Debit $ 12979

Discount Credit $ 2479

Cash Credit $ 10000

Date Cash Paid Interest Discount

Carrying Amount

1/1/18 $ 213974 30/6/18 10500 12838 2338 $ 216312 31/12/18 10500 12979 2479 $ 218791

Related Questions

Navigate

• Browse (All)
• Browse J
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.