Edible Insoles Corp. wants to expand their operations and decided to issue $2,000,000 of 3 year,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Edible Insoles Corp. wants to expand their operations and decided to issue $2,000,000 of 3 year, 8.2% bonds, on 1/1/20. Interest is payable semiannually with payments on July 1 and December 31 of each year of the issue. The market rate for bonds of similar risk is 9%. INSTRUCTIONS: Create the journal entry for the issuance of the bonds on 1/1/20. Create the necessary noncash T accounts from this entry and post into them as you make entries. Create an amortization table for the bond issue. 1. 3. S. 6. Create the journal entries for the first three bond interest payments. 3.1 How will the bond be presented on Edible's 12/31/20 balance sheet? 3.2 How will Edible's income statement for the year ended 12/31/20 be affected by the bond? What is the carrying value of the bonds immediately after the third payment? Show two different ways to arrive at that number given the information you should have created. After this step, you can stop posting to the T accounts, if you wish. What is the journal entry on the maturity date 1/1/23? What is the total cost of financing this borrowing? Edible Insoles Corp. wants to expand their operations and decided to issue $2,000,000 of 3 year, 8.2% bonds, on 1/1/20. Interest is payable semiannually with payments on July 1 and December 31 of each year of the issue. The market rate for bonds of similar risk is 9%. INSTRUCTIONS: Create the journal entry for the issuance of the bonds on 1/1/20. Create the necessary noncash T accounts from this entry and post into them as you make entries. Create an amortization table for the bond issue. 1. 3. S. 6. Create the journal entries for the first three bond interest payments. 3.1 How will the bond be presented on Edible's 12/31/20 balance sheet? 3.2 How will Edible's income statement for the year ended 12/31/20 be affected by the bond? What is the carrying value of the bonds immediately after the third payment? Show two different ways to arrive at that number given the information you should have created. After this step, you can stop posting to the T accounts, if you wish. What is the journal entry on the maturity date 1/1/23? What is the total cost of financing this borrowing?
Expert Answer:
Answer rating: 100% (QA)
Stepbystep 1st step All steps Answer only Step 15 1 Journal entry on 1120 for bond issue 112020 Bank 2000000 82 bonds Liability 1958956 82 bonds equit... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Posted Date:
Students also viewed these accounting questions
-
Show two different ways of preparing each of the following compounds via a reductive amination: (a) (b) (c) (d) (e) Z
-
Matt Manufacturing wants to expand their business. Toaccomplish this, they sell 5-year, $1,000 face value, zero-couponbonds (assume they have annual compounding). Assume you buy thesebonds when...
-
Show two different ways to state that the means of two populations are equal.
-
Coin Flips You flip a coin 100 times and get 58 heads and 42 tails. Calculate the chi-square statistic by hand showing your work, assuming the coin is fair.
-
The following represents a project that should be scheduled using CPM: a. Draw the network. b. What is the critical path? c. What is the expected project completion time? d. What is the probability...
-
The following data apply to Grullon-Ikenberry Inc. (GII): Value of operations...............................$1,000 Short-term investments............................$ 100...
-
Differentiate between tax compliance and tax planning.
-
Clarion Manufacturing Company is a publicly held company that is engaged in the manufacture of home and office furniture. The firms most recent income statement and balance sheet are found below. a....
-
11. A boy holds a ball over the edge of a balcony. The ball is a concrete floor below and bounces back up to a lower height. onto ball released from the balcony concrete floor bag of flour onto art...
-
Explain why errors in the valuation of inventory at the end of the year are sometimes called counterbalancing or self-correcting.
-
2. The bar has more shading than the bar, so is greater than . This is written >(or
-
Find a politically oriented website and analyze the material using George's six questions for evaluating sources (George, 2008). What does your analysis say about the material on the website?
-
Referring to the Altex Corporation case study, why was a risk management plan considered unnecessary? Referring to the Altex Corporation case study, How effective will the risk management plan be if...
-
I am a new employee in your marketing department and have never heard of CRM. Educate me by discussing what CRM is as both a noun and a verb, what we use CRM tools for, what the benefits of using a...
-
The Intercultural Briefing * helps them strengthen the workplace culture in New Zealand. Realizing that they must work with Filipinos and Germans across cultures, they want to make suggestions on how...
-
Talent Acquisition and Interviews: Include appropriate citations and at least 3 references to support your response. Narrowing a pool of candidates can be difficult. The hiring manager must evaluate...
-
The sum of two numbers is 7. Three times the larger number plus two times the smaller number is 35. Find the numbers. The larger number is and the smaller number is 0
-
Refrigerant R-12 at 30C, 0.75 MPa enters a steady flow device and exits at 30C, 100 kPa. Assume the process is isothermal and reversible. Find the change in availability of the refrigerant.
-
Using the information provided in E22-12, prepare the statement of cash flows for Ferragosto Services, Ltd. under the direct method. In E22-12 Ferragosto Services, Ltd. provided the following...
-
What are the two different reporting formats for preparing the operating activities section of the statement of cash flows? Explain.
-
Cisco System, Inc., the leading Internet protocol- based networking equipment company, has significant holdings of investment securities. Use the financial statement information provided to analyze...
-
Explain the building blocks of accounting: ethics, principles, and assumptions.
-
On May 1, 2025, Park Flying School Ltd., a company that provides flying lessons, was started with an investment of 45,000 cash in the business. Following are the assets and liabilities of the company...
-
The historical cost basis results in: a. initially recording assets at cost and adjusting when the current value changes. b. keeping activities of an entity separate and distinct from its owner. c....
Study smarter with the SolutionInn App