On February 1, 2024, Sanyal Motor Products issued 6% bonds, dated February 1, with a face...

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On February 1, 2024, Sanyal Motor Products issued 6% bonds, dated February 1, with a face amount of $80 million. The bonds mature on January 31, 2028 (four years). The market yield for bonds of similar risk and maturity was 8%. Interest is paid semiannually on July 31 and January 31. Barnwell Industries acquired $80,000 of the bonds as a long-term investment. The fiscal years of both firms end December 31. ● ● Required: 1. Determine the price of the bonds issued on February 1, 2024. 2-a. Prepare amortization schedules that indicate Sanyal's effective interest expense for each interest period during the term to maturity. 2-b. Prepare amortization schedules that indicate Barnwell's effective interest revenue for each interest period during the term to maturity. 3. Prepare the journal entries to record the issuance of the bonds by Sanyal and Barnwell's investment on February 1, 2024. 4. Prepare the journal entries by both firms to record all events related to the bonds through January 31, 2026. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Complete this question by entering your answers in the tabs below. Price of the bonds Req 4 Sanyal Req 1 Req 2A Req 2B Req 3 Determine the price of the bonds issued on February 1, 2024. Note: Do not round intermediate calculations. Enter your answer in whole dollars. < Req 1 Req 4 Barnwell Req 2A > Complete this question by entering your answers in the tabs below. Payment Cash Number Payment Req 1 Req 2A Req 2B Req 3 Prepare amortization schedules that indicate Sanyal's effective interest expense for each interest period during the term to maturity. Note: Do not round intermediate calculations. Enter your answers in whole dollars. Show less 1 2 3 4 5 6 7 8 Totals Effective Interest Req 4 Sanyal Increase in Balance < Req 1 Req 4 Barnwell Outstanding Balance Req 2B > Complete this question by entering your answers in the tabs below. Payment Cash Effective Number Payment Interest Req 1 Req 2A Req 2B Req 3 Prepare amortization schedules that indicate Barnwell's effective interest revenue for each interest period during the term to maturity. Note: Do not round intermediate calculations. Enter your answers in whole dollars. Show less 1 2 3 4 5 6 7 8 Totals Increase in Balance Req 4 Sanyal Outstanding Balance < Req 2A Req 4 Barnwell Req 3 > Complete this question by entering your answers in the tabs below. View transaction list Req 1 Req 2A Req 2B Req 3 Prepare the journal entries to record the issuance of the bonds by Sanyal and Barnwell's investment on February 1, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars. Show less Journal entry worksheet < 1 2 Record the issuance of the bonds by Sanyal. Note: Enter debits before credits. Date February 01, 2024 Record entry General Journal Req 4 Sanyal Clear entry < Req 2B Req 4 Barnwell Debit Credit View general journal > Req 4 Sanyal > Journal entry worksheet < 1 2 Record the Bond investment by Barnwell. Note: Enter debits before credits. Date February 01, 2024 Record entry General Journal Clear entry Debit Credit View general journal View transaction list Req 1 Req 2A Req 2B Req 3 Prepare the journal entries by Sanyal to record all events related to the bonds through January 31, 2026. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars. Show less Journal entry worksheet < 1 2 3 4 5 6 Note: Enter debits before credits. Date July 31, 2024 Record the payment of interest for Sanyal Company. Record entry General Journal Req 4 Sanyal Clear entry Req 4 Barnwell < Req 3 Debit Credit View general journal > Req 4 Barnwell > Journal entry worksheet < 1 2 3 Record the accrued interest for Sanyal Company. 4 5 6 Note: Enter debits before credits. General Journal Date December 31, 2024 Record entry Clear entry Debit Credit View general journal > Journal entry worksheet < 1 2 3 4 5 6 Record the payment of interest for Sanyal Company. Note: Enter debits before credits. Date January 31, 2025 Record entry General Journal Clear entry Debit Credit View general journal > Journal entry worksheet < 1 2 3 4 5 6 Record the payment of interest for Sanyal Company. Note: Enter debits before credits. Date July 31, 2025 Record entry General Journal Clear entry Debit Credit View general journal > Journal entry worksheet < 1 1 2 3 LO 4 5 Record entry Record the accrued interest for Sanyal Company. Note: Enter debits before credits. Date December 31, 2025 6 General Journal Clear entry Debit Credit View general journal > Journal entry worksheet < 1 2 3 4 Record the payment of interest for Sanyal Company. Date January 31, 2026 5 LO Note: Enter debits before credits. Record entry 6 General Journal Clear entry Debit Credit View general journal Complete this question by entering your answers in the tabs below. View transaction list Req 1 Req 2A Req 2B Req 3 Prepare the journal entries by Barnwell to record all events related to the bonds through January 31, 2026. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars. Show less Journal entry worksheet 1 2 3 4 5 6 Note: Enter debits before credits. Date July 31, 2024 Record the receipt of interest for Barnwell Company. Record entry General Journal Req 4 Sanyal Clear entry Req 4 Sanyal Req 4 Barnwell Debit Credit View general journal > Req 4 Barnwell > Journal entry worksheet < 1 2 3 4 5 6 Record the accrued interest for Barnwell Company. Note: Enter debits before credits. Date General Journal December 31, 2024 Record entry Clear entry Debit Credit View general journal > Journal entry worksheet < 12 3 4 5 6 Record the receipt of interest for Barnwell Company. Note: Enter debits before credits. Date General Journal January 31, 2025 Record entry Clear entry Debit Credit View general journal > Journal entry worksheet 1 2 3 < 1 4 5 6 Record the receipt of interest for Barnwell Company. Note: Enter debits before credits. Date July 31, 2025 Record entry General Journal Clear entry Debit Credit View general journal > Journal entry worksheet < 1 2 3 Record the accrued interest for Barnwell Company. 4 5 6 Note: Enter debits before credits. Date General Journal December 31, 2025 Record entry Clear entry Debit Credit View general journal > Journal entry worksheet < 1 2 3 4 Date January 31, 2026 LO Record entry 5 Record the receipt of interest for Barnwell Company. Note: Enter debits before credits. 6 General Journal Clear entry Debit Credit View general journal On February 1, 2024, Sanyal Motor Products issued 6% bonds, dated February 1, with a face amount of $80 million. The bonds mature on January 31, 2028 (four years). The market yield for bonds of similar risk and maturity was 8%. Interest is paid semiannually on July 31 and January 31. Barnwell Industries acquired $80,000 of the bonds as a long-term investment. The fiscal years of both firms end December 31. ● ● Required: 1. Determine the price of the bonds issued on February 1, 2024. 2-a. Prepare amortization schedules that indicate Sanyal's effective interest expense for each interest period during the term to maturity. 2-b. Prepare amortization schedules that indicate Barnwell's effective interest revenue for each interest period during the term to maturity. 3. Prepare the journal entries to record the issuance of the bonds by Sanyal and Barnwell's investment on February 1, 2024. 4. Prepare the journal entries by both firms to record all events related to the bonds through January 31, 2026. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Complete this question by entering your answers in the tabs below. Price of the bonds Req 4 Sanyal Req 1 Req 2A Req 2B Req 3 Determine the price of the bonds issued on February 1, 2024. Note: Do not round intermediate calculations. Enter your answer in whole dollars. < Req 1 Req 4 Barnwell Req 2A > Complete this question by entering your answers in the tabs below. Payment Cash Number Payment Req 1 Req 2A Req 2B Req 3 Prepare amortization schedules that indicate Sanyal's effective interest expense for each interest period during the term to maturity. Note: Do not round intermediate calculations. Enter your answers in whole dollars. Show less 1 2 3 4 5 6 7 8 Totals Effective Interest Req 4 Sanyal Increase in Balance < Req 1 Req 4 Barnwell Outstanding Balance Req 2B > Complete this question by entering your answers in the tabs below. Payment Cash Effective Number Payment Interest Req 1 Req 2A Req 2B Req 3 Prepare amortization schedules that indicate Barnwell's effective interest revenue for each interest period during the term to maturity. Note: Do not round intermediate calculations. Enter your answers in whole dollars. Show less 1 2 3 4 5 6 7 8 Totals Increase in Balance Req 4 Sanyal Outstanding Balance < Req 2A Req 4 Barnwell Req 3 > Complete this question by entering your answers in the tabs below. View transaction list Req 1 Req 2A Req 2B Req 3 Prepare the journal entries to record the issuance of the bonds by Sanyal and Barnwell's investment on February 1, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars. Show less Journal entry worksheet < 1 2 Record the issuance of the bonds by Sanyal. Note: Enter debits before credits. Date February 01, 2024 Record entry General Journal Req 4 Sanyal Clear entry < Req 2B Req 4 Barnwell Debit Credit View general journal > Req 4 Sanyal > Journal entry worksheet < 1 2 Record the Bond investment by Barnwell. Note: Enter debits before credits. Date February 01, 2024 Record entry General Journal Clear entry Debit Credit View general journal View transaction list Req 1 Req 2A Req 2B Req 3 Prepare the journal entries by Sanyal to record all events related to the bonds through January 31, 2026. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars. Show less Journal entry worksheet < 1 2 3 4 5 6 Note: Enter debits before credits. Date July 31, 2024 Record the payment of interest for Sanyal Company. Record entry General Journal Req 4 Sanyal Clear entry Req 4 Barnwell < Req 3 Debit Credit View general journal > Req 4 Barnwell > Journal entry worksheet < 1 2 3 Record the accrued interest for Sanyal Company. 4 5 6 Note: Enter debits before credits. General Journal Date December 31, 2024 Record entry Clear entry Debit Credit View general journal > Journal entry worksheet < 1 2 3 4 5 6 Record the payment of interest for Sanyal Company. Note: Enter debits before credits. Date January 31, 2025 Record entry General Journal Clear entry Debit Credit View general journal > Journal entry worksheet < 1 2 3 4 5 6 Record the payment of interest for Sanyal Company. Note: Enter debits before credits. Date July 31, 2025 Record entry General Journal Clear entry Debit Credit View general journal > Journal entry worksheet < 1 1 2 3 LO 4 5 Record entry Record the accrued interest for Sanyal Company. Note: Enter debits before credits. Date December 31, 2025 6 General Journal Clear entry Debit Credit View general journal > Journal entry worksheet < 1 2 3 4 Record the payment of interest for Sanyal Company. Date January 31, 2026 5 LO Note: Enter debits before credits. Record entry 6 General Journal Clear entry Debit Credit View general journal Complete this question by entering your answers in the tabs below. View transaction list Req 1 Req 2A Req 2B Req 3 Prepare the journal entries by Barnwell to record all events related to the bonds through January 31, 2026. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars. Show less Journal entry worksheet 1 2 3 4 5 6 Note: Enter debits before credits. Date July 31, 2024 Record the receipt of interest for Barnwell Company. Record entry General Journal Req 4 Sanyal Clear entry Req 4 Sanyal Req 4 Barnwell Debit Credit View general journal > Req 4 Barnwell > Journal entry worksheet < 1 2 3 4 5 6 Record the accrued interest for Barnwell Company. Note: Enter debits before credits. Date General Journal December 31, 2024 Record entry Clear entry Debit Credit View general journal > Journal entry worksheet < 12 3 4 5 6 Record the receipt of interest for Barnwell Company. Note: Enter debits before credits. Date General Journal January 31, 2025 Record entry Clear entry Debit Credit View general journal > Journal entry worksheet 1 2 3 < 1 4 5 6 Record the receipt of interest for Barnwell Company. Note: Enter debits before credits. Date July 31, 2025 Record entry General Journal Clear entry Debit Credit View general journal > Journal entry worksheet < 1 2 3 Record the accrued interest for Barnwell Company. 4 5 6 Note: Enter debits before credits. Date General Journal December 31, 2025 Record entry Clear entry Debit Credit View general journal > Journal entry worksheet < 1 2 3 4 Date January 31, 2026 LO Record entry 5 Record the receipt of interest for Barnwell Company. Note: Enter debits before credits. 6 General Journal Clear entry Debit Credit View general journal

Answer rating: 100% (QA)

1 Determine the price of the bonds issued on February 1 2024 The price of the bonds will be the present value of the bonds future cash flows which con... View the full answer