FREE Trial

On January 1, 2017, Kittle Corporation issued five-year, 4% bonds payable with a face value of $2,500,000. The bonds were

Question:

On January 1, 2017, Kittle Corporation issued five-year, 4% bonds payable with a face value of $2,500,000. The bonds were issued at 95 and pay interest on January 1 and July 1. Kittle amortizes bond discounts using the straight-line method. On December 31, 2019, Kittle retired the bonds early by purchasing them at a market price of 97. The company’s fiscal year ends on December 31.


Requirements

1. Journalize the issuance of the bonds on January 1, 2017.

2. Record the semiannual interest payment and amortization of bond discount on July 1, 2017.

3. Record the interest accrual and discount amortization on December 31, 2017.

4. Calculate the carrying value of the bonds payable on December 31, 2019, prior to their retirement.

5. Calculate the gain or loss on the retirement of the bonds payable on December 31, 2019. Indicate where this gain or loss will appear in the financial statements.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...

This problem has been solved!


Do you need an answer to a question different from the above? Ask your question!

Step by Step Answer:

Answer rating: 100% (6 reviews)

Req 1 Journal DATE ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT 2017 Jan 1 Cash 2 50…View the full answer


answer-question
Answered By
tutor-profile-image
Biju George
I am currently working as a Research Associate (in basic science) as well as a course instructor for Medical faculties at a premier Research Institute in India. I have been training faculties from Indian colleges and universities for biotechnology and molecular biology research as a part of refresher program. I also have more than 4 years on experience in online tutoring. I would like to teach Biology ( As and A level, and other certification exams, Biology for 11th and 12th class) and Biotechnology, Molecular biology, Genetic engineering, Biochemistry, Cell biology, Immunology and other life science subjects to B.Sc, M.Sc, Ph.D. students and for the research-oriented private sector. This will help them in publishing or to patent their work in an internationally recognized journal or Patent organizations. My aim is to inspire creativity, develop critical thinking ability, and prepare students for the complex world. I believe my great passion for teaching, various past teaching experience, strong academic background and communication skills will make me an excellent teacher
0.00 0 Reviews 10+ Question Solved
Related Book For  answer-question
Financial Accounting

Financial Accounting

ISBN: 978-0134725987

12th edition

Authors: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.

See More Books
Question Details
Chapter # 9- Long-Term Liabilities
Section: Short Exercises
Problem: 19
View Solution
Create a free account to access the answer
Cannot find your solution?
Post a FREE question now and get an answer within minutes. * Average response time.
Question Posted: June 17, 2019 10:09:14
See More Questions

Students also viewed these Business questions

Q:
On January 1, 2017, Ditchey Corporation issued five-year, 6% bonds payable with a face value of $3,500,000. The bonds were issued at 96 and pay interest on January 1 and July 1. Ditchey amortizes...
A:
Req 1 Journal DATE ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT 2017 Jan 1 Cash 3 50......
Q:
The Tate Company began 2007 with a Retained Earnings account balance of $180,000. During 2007 the following eight events occurred and were properly recorded by the company: 1. Bonds payable with a...
A:
TATE COMPANY Statement of Retained Earnings For Year Ended December 31 2007 Retained earnings as......
Q:
The Tate Company began 2010 with a Retained Earnings account balance of $180,000. During 2010, the following eight events occurred and were properly recorded by the company: 1. Bonds payable with a...
A:
TATE COMPANY Statement of Retained Earnings For Year Ended December 31 2010 Retained earnings as......
Q:
Susan has completed a concept map, assisted by her colleagues, and has recently returned from her meeting with her manager. Her manager is very concerned about the high attrition rate and poor...
A:
a Here are four research questions for Susan s topic focusing on feedback coaching and employee engagement How do employees perceive the impact of fee......
Q:
Verify that the Gram-Schmidt formulae (5.19) also produce an orthogonal basis of a complex vector space under a Hermitian inner product. 1 (5.19)
A:
The key is to make sure the inner products are in t......
Q:
A distillate containing 45 wt% isopropyl alcohol, 50 wt% diisopropyl ether, and 5 wt% water is obtained from the heads column of an isopropyl alcohol finishing umt. The company desires to recover the...
A:
Subject Extraction of isopropanol A from diisopropylether C by water S at 25 o C Given Feed containing 45 wt A 50 wt C and 5 wt S Raffinate to contain 2 5 wt A Extract to contain 20 wt A Liquid liquid......
Q:
Listed below are a number of terms that relate to just-in-time, total quality management, process re-engineering and theory of constraints: Choose the term or terms above that most appropriately...
A:
1 Frequent 2 Total quality management Proc......
Q:
P Co. is looking for some additional financing in order to renovate one of the companys manufacturing plants. It is having difficulty getting new debt financing because its debt-to-equity ratio is...
A:
Memorandum To CFO From Consultant Re Accounting for Renovation of Manufacturing Facility You have asked me to comment on the proposed accounting for the sale of the un renovated facility and subsequen......
Q:
Challenge Identify the negative loops that might be responsible for the goal seeking behaviors shown in figure 4-5. Sketch a causal loop diagram to capture the loops you identify. Identify the state...
A:
Click to View...
Q:
This assignment reviews object-oriented programming concepts such as classes, methods, constructors, accessor methods, and access modifiers. It makes use of an array of objects as a class data...
A:
Solution include include include include define SIZE 20 define ACCOUNTS home turing t90kjm1 CS241 Data Spring2017 Assign2 accounts define TRANS home turing t90kjm1 CS241 Data Spring2017 Assign2 transa......
Q:
On June 30, 2018, the market interest rate is 9%. Ramsey Corporation issues $550,000 of 12%, 20-year bonds payable. The bonds pay interest on June 30 and December 31. The company amortizes bond...
A:
Req 1 Using the PV function in EXCEL the issue price of the bonds is 701 813 Req 2 amortization table A B C D E Semiannual Interest Date Interest Paym......
Q:
Fresno Transportation owns a fleet of 50 semi-trucks. The original cost of the fleet was $7,500,000. Fresno uses straight-line depreciation for the fleet for accounting purposes, and MACRS...
A:
Req 1 GAAP Book value 6 230 000 Tax Book value 5 610 000 Depreciation timing difference 620 00......
Q:
An experiment is designed to study pigment dispersion in paint. Four different mixes of a particular pigment are studied. The procedure consists of preparing a particular mix and then applying that...
A:
Click to View...
Q:
What would cause a manager to engage in earnings management when doing so did not benefit the company the manager works for?
A:
Managers may engage in earnings management sometimes referred to as earnings manipulation or creative accounting for various reasons even if it does not directly benefit the company they work for Here......
Q:
Company managers are aware that the readers of financial statements often use accounting ratios to evaluate their performance. Explain how this could lead to decisions which are against the companys...
A:
While it s true that accounting ratios are commonly used by stakeholders to assess a company s financial performance there are situations where this can lead to decisions that may not align with the c......
Q:
A condition of a seven-year loan of 70,000 is that the borrower will pay equal annual amounts into a sinking fund so that it accumulates at the end of the seven years to the amount of the loan. The...
A:
To calculate the annual payments required to accumulate a sinking fund of 70 000 at t......
Q:
Why would a company with no debt covenants engage in earnings management?
A:
A company with no debt covenants may engage in earnings management for several reasons even though they do not have specific financial constraints imposed by debt agreements Earnings management involv......
Q:
(a) If you were lent 20,000 for 86 days at 5%, how much interest would you pay? (b) If a debt factor offered to discount a 5,000 bill of exchange at 10%, and if the bill had an outstanding period of...
A:
a To calculate the interest on a loan of 20 000 for 86 days at an interest rate of 5 you can use the......
Q:
The flow Q (m3/s) in a rectangular channel is given by the Manning's equation: where d is the depth of water (m), w is the width of the channel (m), S is the slope of the channel (m/m), n is the...
A:
Script file n 0 05 S 0 001 Ssr sqrt S w 0 0 2......
Q:
Determine the values of the given trigonometric functions directly on a calculator. The angles are approximate. tan 0.8035
A:
You may easily calculate the value of the angle s tangen......
Q:
The following situations are independent of one another. 1. An accounting student recently employed by a small company doesnt understand why the company is only depreciating its buildings and...
A:
1 Depreciation is the process of allocating the cost of a long lived asset to expense over the asset......
Q:
During 2009, Federal Express reported the following information (in millions): net sales of $35,497 and net income of $98. Its balance sheet also showed total assets at the beginning of the year of...
A:
a times b A......
Q:
Mangrich International is considering a significant expansion to its product line. The sales force is excited about the opportunities that the new products will bring. The new products are a...
A:
a Without new products With new products Return on assets ratio 500 000 10 960 0......
Economics 7th edition - ISBN: 134738314 - Free Book