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28 Sep 2019
Bond Issued at a Premium
On January 1, 2003, Buster Corporation issued 100 bonds with a parvalue of $ 1,000 each. The stated interest rate on the bond is 10%payable annually on December 31 of each year. The market rate is8%. The bonds will mature 4 years from the date of issue (December31, 2006).
(a) Compute the issue price of the bonds on January 1, 2003.
(b) Provide the journal entry to record the issuance of the bondson January 1, 2003.
(c) Provide the journal entry that Buster should make on December31, 2003 assuming the effective interest method.
(d) Show how the bond liability and the related accounts willappear on the Balance Sheet of Buster on December 31, 2003.
Bond Issued at a Discount
On January 1, 2003, Master Corporation issued 100 bonds with a parvalue of $ 1,000 each. The stated interest rate on the bond is 4%payable annually on December 31 of each year. The market rate is6%. The bonds will mature 4 years from the date of issue (December31, 2006).
(a) Compute the issue price of the bonds on January 1, 2003.
(b) Provide the journal entry to record the issuance of the bondson January 1, 2003.
(c) Provide the journal entry that Master should make on December31, 2003 assuming the effective interest method.
(d) Show how the bond liability and the related accounts willappear on the Balance Sheet of Master on December 31, 2003.
Bond Issued at a Premium
On January 1, 2003, Buster Corporation issued 100 bonds with a parvalue of $ 1,000 each. The stated interest rate on the bond is 10%payable annually on December 31 of each year. The market rate is8%. The bonds will mature 4 years from the date of issue (December31, 2006).
(a) Compute the issue price of the bonds on January 1, 2003.
(b) Provide the journal entry to record the issuance of the bondson January 1, 2003.
(c) Provide the journal entry that Buster should make on December31, 2003 assuming the effective interest method.
(d) Show how the bond liability and the related accounts willappear on the Balance Sheet of Buster on December 31, 2003.
Bond Issued at a Discount
On January 1, 2003, Master Corporation issued 100 bonds with a parvalue of $ 1,000 each. The stated interest rate on the bond is 4%payable annually on December 31 of each year. The market rate is6%. The bonds will mature 4 years from the date of issue (December31, 2006).
(a) Compute the issue price of the bonds on January 1, 2003.
(b) Provide the journal entry to record the issuance of the bondson January 1, 2003.
(c) Provide the journal entry that Master should make on December31, 2003 assuming the effective interest method.
(d) Show how the bond liability and the related accounts willappear on the Balance Sheet of Master on December 31, 2003.
On January 1, 2003, Buster Corporation issued 100 bonds with a parvalue of $ 1,000 each. The stated interest rate on the bond is 10%payable annually on December 31 of each year. The market rate is8%. The bonds will mature 4 years from the date of issue (December31, 2006).
(a) Compute the issue price of the bonds on January 1, 2003.
(b) Provide the journal entry to record the issuance of the bondson January 1, 2003.
(c) Provide the journal entry that Buster should make on December31, 2003 assuming the effective interest method.
(d) Show how the bond liability and the related accounts willappear on the Balance Sheet of Buster on December 31, 2003.
Bond Issued at a Discount
On January 1, 2003, Master Corporation issued 100 bonds with a parvalue of $ 1,000 each. The stated interest rate on the bond is 4%payable annually on December 31 of each year. The market rate is6%. The bonds will mature 4 years from the date of issue (December31, 2006).
(a) Compute the issue price of the bonds on January 1, 2003.
(b) Provide the journal entry to record the issuance of the bondson January 1, 2003.
(c) Provide the journal entry that Master should make on December31, 2003 assuming the effective interest method.
(d) Show how the bond liability and the related accounts willappear on the Balance Sheet of Master on December 31, 2003.
Tod ThielLv2
28 Sep 2019
Related questions
Hello I want some help for this HW:
Kayak Club wants to issue 20, $1,000 bonds on January 1, 2003.The bonds mature in 5 years. The face interest rate is 10%; themarket interest rate is 12%. Interest will be paid semiannually onJune 30 and December 31.
How much money will Kayak Club receive when it issues thebonds?
Make the following journal entries:
At the issue date
At the first interest payment date
At the second interest payment date
GENERAL JOURNAL
Date | Description | Post reference | Debit | credit |
Date | Cash paid | Interest expense | Bond payable | Carrying value |
