Part 3: Early Extinguishment of Debt On January 1, 2021, Free Design Industries had $700,000 of 12% bonds outstanding with a carrying $676,288. Interest Expense was recorded and paid on December 31, 2000 What can you tell me about the market interest rate compared to the stated interest raev were issued? (looking for a general statement-not a specific amoun b. If Free Design decides to call in $400,000 of the bonds for a call price of 102 on 1/1/2021 what would be the required journal entry on 1/1/20217 Date Account Debit Credit

Part 3: Early Extinguishment of Debt On January 1, 2021, Free Design Industries had $700,000 of 12% bonds outstanding with a carrying $676,288. Interest Expense was recorded and paid on December 31, 2000 What can you tell me about the market interest rate compared to the stated interest raev were issued? (looking for a general statement-not a specific amoun b. If Free Design decides to call in $400,000 of the bonds for a call price of 102 on 1/1/2021 what would be the required journal entry on 1/1/20217 Date Account Debit Credit

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 52BE

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Blue Inc. issued P 500,000 face amount of 10% with interest payable on January 1 and July 1. The bonds were called in at 103 on July 1, 2016 and retired them. Unamortized bond discount amounted to P40,000 at July 1, 2016. How much loss should Blue report on this retirement of debt? Answer this with solution pls
9. On August 20, 2025, Micco Co. decides to invest excess cash of $3,200 by purchasing Finch, Inc. bonds. At year-end, December 31, 2025, the market price of the bonds was $2,600. The investment is categorized as available-for-sale debt. Journalize the adjusting entry needed at December 31, 2025. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit Dec. 31, 2025
Sheridan Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2025. Amortized cost Fair value Expected credit loss (a) $50,800 41,600 12.450 Your answer is correct. What is the amount of the credit loss that Sheridan should report on this available-for-sale security at December 31, 2025? (Do not leave any answer field blank. Enter O for amounts.) Amount of the credit loss. $ 9200
The balance sheet for Pharoah Consulting reports the following information on July 1, 2022. Long-term liabilities Bonds payable Less: Discount on bonds payable $2,000,000 160,000 Pharoah decides to redeem these bonds at 105 after paying annual interest. Prepare the journal entry to record the redemption on July 1, 2022. (Credit acco entered. Do not indent manually.) Date Account Titles and Explanation July 1 H $1,840,000 titles are automatically indented when au Debit Credit
With solution pls Blue Inc. issued P 500,000 face amount of 10% with interest payable on January 1 and July 1. The bonds were called in at 103 on July 1, 2016 and retired them. Unamortized bond discount amounted to P40,000 at July 1, 2016. How much loss should Blue report on this retirement of debt? *
The balance sheet for Ivanhoe Company reports the following information on July 1, 2022. IVANHOE COMPANYBalance Sheet (partial) Long-term liabilities Bonds payable $400,000 Less: Discount on bonds payable 9,000 $391,000 Ivanhoe decides to redeem these bonds at 109 after paying annual interest.Prepare the journal entry to record the redemption on July 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1 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 enter an account title enter a debit amount enter a credit amount
At December 31, 2020 the following balances existed on the books of Kingsley Ltd.: Bonds Payable $1,840,000 Interest Payable 50,000 If the bonds are retired on January 1, 2021, for $2,040,000, what will the company report as a loss on redemption? Select one: a. $150,000 O b. $100,000 O c. $200,000 d. $250,000
Blossom Company issued $510,000 of 5-year, 9% bonds at 96 on January 1, 2022. The bonds pay interest annually. (a1) Your answer is correct. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Cash (a2) Discount on Bonds Payable Bonds Payable * Your answer is incorrect. Compute the total cost of borrowing for these bonds. Total cost of borrowing 177310 Debit 489600 20400 Credit 510000
you had been given the following concerning ABC " Company CALLABLE bonds: Value Stated Rate Market Rate Maturity Interest Date Payment 1/7/2017 100,000 10% 6 5 Years Semiannual Selling Price 117,060 Based on the above given information Answer the following questions: if the company is using the effective interest method 1. if the company pays interest on July 14 and December 31 What is the amount of interest expense that must be presented on the company's income statement for the year 2018 ?· The Answer is: 2. At what value must the company present its bonds payable as 31/12/2018 ? The Answer is 3. If the company called 60 % of its outstanding bonds at 103 on 30/6/2019, then the company must Pay Cash with an amount of For the year 2019 the company must Present interest Expense with value of on income statement, and a of on the income statement as
Requirement 3. Prepare a comprehensive income statement for Thyme Investments for year ended December 31, 2018. Assume net income was $320,000. (Use a minus sign or parentheses to enter a loss.) 2018 Jan. 5 Purchased Vince Company's $525,000 bond at face value. Thyme classified the investment as available-for-sale. The Vince bond pays interest at the annual rate of 6% on June 30 and December 31 and matures on December 31, 2021 Management's intent is to keep the bonds for several years . June 30 Received an interest payment from Vince Dec.31 Received an interest payment from Vince. Dec.31 Adjusted the investment to its current market value of $518.500 .
10. Company A has $ 100,000 of 5 % bonds that mature on December 31, 2020. (Note that all interest has already been paid and the discount is fully amortized. General Journal Page Date Account Titles and Explanation Debit Credit Acti Go to (UNITED STATES)
PB5. LO 13.3 Dixon Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $480,000. Interest is payable annually. The discount is amortized using the straight-line method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. June 30, 2019: entry to record payment of interest to bondholders C. June 30, 2019: entry to record amortization of discount D. June 30, 2020: entry to record payment of interest to bondholders E. June 30, 2020: entry to record amortization of discount