The annual accounting period ends December 31. The bonds were issued at 103 on J
ID: 2575971 • Letter: T
Question
The annual accounting period ends December 31. The bonds were issued at 103 on January 1, 2015, when the market interest rate was 9 percent. Assume the company uses straight-line amortization and adjusts for any rounding errors when recording interest expense in the final year.
Compute the cash received from the bond issuance in dollar. TIP: The issue price typically is quoted at a percentage of face value.
Prepare the journal entry to record the issuance of the bonds and the payment of interest on December 31, 2015 and 2016. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
1. Record the issuance of bonds with a face value of $670,000 at 103.
2. Record the interest payment on December 31, 2015.
3. Record the interest payment on December 31, 2016.
How much interest expense would be reported on the income statements for 2015 and 2016?
Compute the bond value which should be reported on the balance sheets at December 31, 2015 and 2016.
Southwest Corporation issued bonds with the following details:Explanation / Answer
Prepare the journal entry to record the issuance of the bonds and the payment of interest on December 31, 2015 and 2016
How much interest expense would be reported on the income statements for 2015 and 2016?
2015 = 62980
2016 = 62980
Compute the bond value which should be reported on the balance sheets at December 31, 2015 and 2016.
Date accounts & Explanation debit credit jan 1,2015 Cash a/c 690100 Bonds payable a/c 670000 Premium on bonds payable a/c 20100 (To record issue of bonds payable ) dec 31,2015 Interest expenses a/c 62980 Amortization of premium on bonds payable a/c (20100/5) 4020 Cash a/c 67000 (To record interest expenses) dec 31,2016 Interest expenses a/c 62980 Amortization of premium on bonds payable a/c (20100/5) 4020 Cash a/c 67000 (To record interest expenses)Related Questions
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