Tarawa Limited issued $720,000 of 10-year, 5% bonds on January 1, 2018, when the market interest...

  
 
 

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Tarawa Limited issued $720,000 of 10-year, 5% bonds on January 1, 2018, when the market interest rate was 6%. Tarawa received $666,444 when the bonds were issued. Interest is payable semi-annually on July 1 and January 1. Tarawa has a December 31 year end. Record the issue of the bonds on January 1. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation. Debit Credit Jan. 1 666444 Cash Bonds Payable 666444 Record the payment of interest on July 1. (Round answers to O decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1 Interest Expense Bonds Payable Cash 18000 Record the accrual of interest on December 31. (Round answers to O decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 Interest Expense 19993 Bonds Payable Interest Payable Prove the amount of cash received when the bonds were sold by determining the bonds' present value (issue price) on January 1, 2018. Prove the carrying amount of the bonds, one year later, by determining the present value of the bonds at that time. (Round answers to O decimal places, e.g. 5,275.) Bonds' present value (issue price) on January 1, 2018 $ 666436 Present value of the bonds 664451 eTextbook and Media List of Accounts S Tarawa Limited issued $720,000 of 10-year, 5% bonds on January 1, 2018, when the market interest rate was 6%. Tarawa received $666,444 when the bonds were issued. Interest is payable semi-annually on July 1 and January 1. Tarawa has a December 31 year end. Record the issue of the bonds on January 1. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation. Debit Credit Jan. 1 666444 Cash Bonds Payable 666444 Record the payment of interest on July 1. (Round answers to O decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1 Interest Expense Bonds Payable Cash 18000 Record the accrual of interest on December 31. (Round answers to O decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 Interest Expense 19993 Bonds Payable Interest Payable Prove the amount of cash received when the bonds were sold by determining the bonds' present value (issue price) on January 1, 2018. Prove the carrying amount of the bonds, one year later, by determining the present value of the bonds at that time. (Round answers to O decimal places, e.g. 5,275.) Bonds' present value (issue price) on January 1, 2018 $ 666436 Present value of the bonds 664451 eTextbook and Media List of Accounts S

Answer rating: 100% (QA)

CS ANS Date of Jan OLJUL 31Dec Record The issue of The Bond on Jant Accounts and Explan... View the full answer