Journal entry to record the bonds issuance

Assignment Help Financial Accounting
Reference no: EM131292123

Heathrow issues $2,300,000 of 8%, 15-year bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,987,457. Required:

1. Prepare the January 1, 2011, journal entry to record the bonds’ issuance.

2(a) For each semiannual period, complete the tables below to calculate the cash payment.

2(b) For each semiannual period, complete the tables below to calculate the straight-line discount amortization.

2(c) For each semiannual period, complete the tables below to calculate the bond interest expense.

3. Complete the tables below to calculate the total bond interest expense to be recognized over the bonds' life.

4. Prepare the first two years of an amortization table using the straight-line method.

5. Prepare the journal entries to record the first two interest payments.

Reference no: EM131292123

Questions Cloud

Total sales and total cost of merchandise sold for period : The beginning inventory of Merchandise at Waldo Co. and data on purchases and sales for a three-month period are as follows: Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustr..
Outside equity requirement for nonconsolidation : Based on your understanding of the information presented in the case, how did Enron’s Chewco SPE fail to meet the outside equity requirement for nonconsolidation? Did Enron meet the control requirement for non- consolidation?
Why is it important to hire accountants : Why is it important to hire accountants that understand the unique needs of a healthcare organization. If there is an increase in accounts receivable from one accounting period to the next, what affect would this have on the cash flow activities? Ali..
The owner of a small family-owned business prepares : The owner of a small family-owned business prepares his own payroll, but rapid expansion is making demands for his time in other areas. He hires you to design payroll procedures with the proper internal controls that a small payroll department can ha..
Journal entry to record the bonds issuance : Heathrow issues $2,300,000 of 8%, 15-year bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,987,457. Prepare the January 1, 2011, journal entry to record the bonds’ issuance...
If a straight-line depreciation method is used : A Caribbean cruise line has purchased a new cruise ship for $670,000 and expects to realize a net revenue of $190,000.00 each year for the next 10 years. The estimated salvage value of the ship at the end of its useful life of 10 years is $52,000. If..
Compute the double declining balance book value : Compute the double declining balance book value at the end of the 3rd year for an asset that originally cost $872 with a depreciable life of 5 years and a salvage value of $70.
Estimated annual operating and maintenance cost : An inspecting and profiling web controller that costs $40,000 has a life of 8 years with a $5000 salvage value. The estimated annual operating and maintenance cost is $3700 per year. If use classical straight line depreciation method, fill in blanks ..
Determine the ending inventory cost : The beginning inventory of Merchandise at Waldo Co. and data on purchases and sales for a three-month period are as follows: Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustr..

Reviews

Write a Review

 

Financial Accounting Questions & Answers

  Prepared at the date of the acquisition combination

Fine Co. issued its common stock in exchange for the common stock of Dandy Corp. in an acquisition. At the date of the combination, Fine had land with a book value of $520,000 and a fair value of $595,000. Dandy had land with a book value of $230,000..

  Assume the firm used straight-line amortization

Hurst, Incorporated sold its 8% bonds with a maturity value of $3,000,000 on August 1, 2009 for $2,946,000. At the time of the sale, the bonds had 5 years until they reached maturity. Interest on the bonds is payable semi annually on August 1 and Feb..

  Effect on net income

What is the effect on net income if sales is increased by 1500 units.

  The amount represents income for swift company

The following data relate to Swift Company for the year ended December 31, 2010. Swift Company uses the accrual basis. - the amount represents income for Swift Company for the year ended December 31, 2010?

  Straight-line amortization is appropriate

Perla Company acquires 40% of the voting stock of Stanton Corporation for $8,000,000 on January 1, 2016. At the time, the book value of Stanton was $20,000,000. During 2016, Stanton reported net income of $2,500,000 and paid dividends of $600,000. St..

  Excess foreign tax credit position to persist in long-run

Foreign Tax Credit Limitation. Tucson, a U.S. corporation organized in Year 1, reports the following items for a three-year period. What is Tucson’s foreign tax credit limitation for each of the three years. What measures should Tucson consider if it..

  Prepare a loan amortization schedule for loan

Determine the annual payment on a $500,000, 12 percent business loan from a commercial bank that is to be amortized over a five-year period. Determine the annual payment on a $15,000 loan that is to be amortized over a four-year period and carries a ..

  Prepare the entry to record nicholss investment

Barbara Ripley and Fred Nichols decide to organize the ALL-Star partnership. Ripley invests $15,000 cash, and Nichols contributes $10,000 cash and equipment having a book value of $3,500. Prepare the entry to record Nichols"s investment in the pa..

  Calculate variance analysis using given datanbsptarget

calculate variance analysis using given data.nbsptarget companys actual results for the period weresales volume in

  Environmental issues-gasoline four-cylinder model

Mary Zimmerman decided to purchase a new automobile. Being concerned about environmental issues, she is leaning toward the hybrid rather than the completely gasoline four-cylinder model.  Determine the payback period of the incremental investment if ..

  Estimate of useful life more closely reflects reality

Airline X depreciates its airplanes over a 15-year period and estimates a salvage value of 10% of the cost of the plane. At the same time, Airline Y depreciates identical airplanes over a 25-year period and estimates a salvage value of 15% of the cos..

  Corporation may have nonresident alien shareholders

Which of the following is a disadvantage of filing as an S Corporation? There is a maximum of 75 shareholders. The corporation may have only one class of stock. Income from an S corporation may not be subject to self-employment tax. There is a maximu..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd