The Nicety School (TNS), a leading international school of etiquette, sells $7,000,000 of six-year, 8% bonds...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The Nicety School (TNS), a leading international school of etiquette, sells $7,000,000 of six-year, 8% bonds priced to yield 8.8%. The bonds are dated July 1, 2020, but due to some regulatory hurdles are not issued until December 1, 2020. Interest is payable annually on June 30 each year. TNS can call the bonds on July 1, 2024, at 103. The bonds sell for $6,747,284 plus accrued interest. TNS sells shares to the public for the first time in early 2023. They use part of the IPO (initial public offering) proceeds to buy back $3,500,000 (face value) of the bonds in the open market on July 1, 2023. TNS pays a total of $3,420,000 to reacquire the bonds and retires them. On July 1, 2024, TNS calls the remaining bonds and retires them. The company's year-end is June 30. Read the requirements. iRequirement Requirements a. Complete a bond amortization spreadsheet using the format that follows. Include the partial redemption of bonds on July 1, 2023. Date Interest expense Interest paid Discount amortized Amortized cost Prepare journal entries to record: b. the issuance of the bonds on December 1, 2020, assuming that TNS has adopted a policy of crediting interest expense for the accrued interest on the date of sale; c. payment of interest and related amortization on June 30, 2021; d. payment of interest and related amortization on June 30, 2023; e. repurchase of the bonds on July 1, 2023; f. payment of interest and related amortization on June 30, 2024; and g. repurchase of the bonds on July 1, 2024. (Record debits first, then credits. Explanations are not required.) Print Done The Nicety School (TNS), a leading international school of etiquette, sells $7,000,000 of six-year, 8% bonds priced to yield 8.8%. The bonds are dated July 1, 2020, but due to some regulatory hurdles are not issued until December 1, 2020. Interest is payable annually on June 30 each year. TNS can call the bonds on July 1, 2024, at 103. The bonds sell for $6,747,284 plus accrued interest. TNS sells shares to the public for the first time in early 2023. They use part of the IPO (initial public offering) proceeds to buy back $3,500,000 (face value) of the bonds in the open market on July 1, 2023. TNS pays a total of $3,420,000 to reacquire the bonds and retires them. On July 1, 2024, TNS calls the remaining bonds and retires them. The company's year-end is June 30. Read the requirements. iRequirement Requirements a. Complete a bond amortization spreadsheet using the format that follows. Include the partial redemption of bonds on July 1, 2023. Date Interest expense Interest paid Discount amortized Amortized cost Prepare journal entries to record: b. the issuance of the bonds on December 1, 2020, assuming that TNS has adopted a policy of crediting interest expense for the accrued interest on the date of sale; c. payment of interest and related amortization on June 30, 2021; d. payment of interest and related amortization on June 30, 2023; e. repurchase of the bonds on July 1, 2023; f. payment of interest and related amortization on June 30, 2024; and g. repurchase of the bonds on July 1, 2024. (Record debits first, then credits. Explanations are not required.) Print Done
Expert Answer:
Answer rating: 100% (QA)
a Year 1212020 Bond 712023 Amortization Table Interest expense... View the full answer
Related Book For
Introduction to Financial Accounting
ISBN: 978-0133251036
11th edition
Authors: Charles Horngren, Gary Sundem, John Elliott, Donna Philbrick
Posted Date:
Students also viewed these finance questions
-
Sony Corporation is a leading international supplier of audio and video equipment. The Sony annual report at the end of the 2011 fiscal year included the following balance sheet items (Japanese yen...
-
A partial bond amortization schedule for $2-million, 5-year bonds is presented below: (a) Fill in the missing words or amounts for items [1] through [6]. (b) What is the bonds' face value? (c) What...
-
A partial bond amortization schedule for Chiasson Corp. is provided below. Chiasson has a December 31 year end. (a) Was the bond issued at a premium or discount? (b) Record the interest payment on...
-
find the steady state expression for vo in the circuit fig 9.32 if ig = 500cos2000tmA 3) 9.32 Find the steady-state expression for u,, in the circuit of Fig. P9.32 if i = 500 cos 2000 mA. Figure...
-
At what price would Arrowsmith Lumber be willing to purchase the timber rights described in Problem 4 if it requires a return on investment of 15%? In Problem 4 The timber rights to a tract of forest...
-
The determination of the cost of goods manufactured involves the following factors: (A) Beginning work in process inventory, (B) Total manufacturing costs, and (C) Ending work in process inventory....
-
The Anchor Glass Container Corporation and its parent company, Consumers Packaging, Inc. (CPI), entered into a series of agreements with Encore Glass, Inc., to supply glass containers of a specific...
-
Wright Company deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on May 31, 2013, its Cash account shows a $ 27,500 debit...
-
Based on the above case study, "Want-2-Work", present each of the following: 1) ER diagram 2) Relational model 3) Rules or assumptions made 4) Between 3 or 5 queries using the relational model...
-
Given is a CPM project network diagram as shown below. Activit y day Start Start 0 A 5 A B B 9 a) The Project Completion time = Blank 1 days. C 4 C D b) The Earliest Start time, ES, of Activity G =...
-
Given the circuit below, find the mesh current 12(t). 100 Cos (10000) 0.1H mm ((t) wwwww 100 5F HE i(t) 30.14
-
Did Fama and French (1996) find evidence to support a link between earnings and the size and value factors? Review their findings. What are the underlying state variables that produce variation in...
-
Kothari, Shanken, and Sloan (1995) found evidence to support the CAPM. Also, they criticized the Fama and French studies. Review these issues in their study.
-
Kolari, Liu, and Huang (KLH) (2021) argued that the mean-variance parabola is shaped by the dual systematic risk effects of beta risk and zeta risk. How is the architecture of the parabola affected...
-
Fama and French (1996) argued that size and value factors are linked to economic fundamentals such as earnings within the firm. What were their arguments in this regard?
-
How did Kolari, Liu, and Zhang (KLH) (2021) compute mean market returns as well as the return dispersion for U.S. stocks? Are equal-weighted or value weighted return used in their computations of...
-
Currently, The Ohio State University is dealing with a public relations nightmare. The head coach is dealing with details of his staff member committing a crime, and whether his response was...
-
For all of the following words, if you move the first letter to the end of the word, and then spell the result backwards, you will get the original word: banana dresser grammar potato revive uneven...
-
Analyze the effect of the following errors on the net profit figures of Yokahama Trading Company (YTC) for 20X0 and 20X1. Choose one of three answers: understated (U), overstated (O), or no effect...
-
Distinguish between a sales return and a sales allowance.
-
In the United States, it is common to provide abbreviated financial data quarterly with full financial statements provided annually. In some countries companies provide only annual data. Discuss the...
-
Mexico has labor laws that specify a daily (rather than hourly) minimum wage. In 2018, the daily minimum wage in Mexico was about 103 pesos per day, and the exchange rate between Mexican pesos and...
-
In 2017, an estimated 7.7 million Mexican-born immigrants were employed in the United States. a. If 60 percent of the Mexican-born immigrants remitted money to family members in Mexico in 2017, and...
-
A mathematical approximation called the rule of 70 tells us how long it will take for something to double in size if it grows at a constant rate. The doubling time is approximately equal to the...
Study smarter with the SolutionInn App