On June 1, 2020, Anushka Bottle Company sold $1,000,000 in long-term bonds for $877,600. The bonds...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On June 1, 2020, Anushka Bottle Company sold $1,000,000 in long-term bonds for $877,600. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective interest method. Instructions: (a) Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Include only the first four years. Make sure all columns and rows are properly labeled. (Round to the nearest dollar.) (b) The sales price of $877,600 was determined from present value tables. Specifically explain how one would determine the price using present value tables. (c) Assuming that interest and discount amortization are recorded each May 31, prepare the adjusting entry to be made on December 31, 2021. (Round to the nearest dollar.) On June 1, 2020, Anushka Bottle Company sold $1,000,000 in long-term bonds for $877,600. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective interest method. Instructions: (a) Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Include only the first four years. Make sure all columns and rows are properly labeled. (Round to the nearest dollar.) (b) The sales price of $877,600 was determined from present value tables. Specifically explain how one would determine the price using present value tables. (c) Assuming that interest and discount amortization are recorded each May 31, prepare the adjusting entry to be made on December 31, 2021. (Round to the nearest dollar.)
Expert Answer:
Related Book For
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon
Posted Date:
Students also viewed these accounting questions
-
The Willy Bunker School of Karate has annual fixed operating costs of $24,000. Each student pays $200 in fees; $40 of this amount covers the per student cost of instructional hand-outs and supplies....
-
Creek Construction purchased a machine for $26,000. It traded in an old machine and received a $4,200 trade-in allowance. The old machine cost $24,000 and had accumulated depreciation of $16,000 to...
-
On June 1, 2013, Everly Bottle Company sold $2,000,000 in long-term bonds for $1,754,200. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds...
-
Explain how to transform sin tan + cos into sec.
-
A 57Fe nucleus at rest emits a 14.0-keV photon. Use conservation of energy and momentum to deduce the kinetic energy of the recoiling nucleus in electron volts. (Use Mc2 = 8.60 x 10-9 J for the final...
-
A driver's manual states that the stopping distance quadruples as the speed doubles; that is, if it takes 30 ft to stop a car moving at 25 mph then it would take 120 ft to stop a car moving at 50...
-
True or False. There is no need for trending of bearings. Bearings have a calculatable performance life, known as the L10 life, and the decision to replace them can be automatically timed by a...
-
Lifetime Distribution markets classic childrens books. At the beginning of June, Lifetime had in beginning inventory 1,200 books with a unit cost of $3. During June, Life time made the following...
-
Cooperative has a straight-line depreciation policy and expected economy life of its taxis for 5 years. If the drivers choose bought the taxi in cash, then cash should be paid at the day of...
-
A machine was purchased on 2nd July 2016 for $1,200,000. It was traded in for new one whose price was $1,000,000 on 2nd June 2020 and the company paid $300,000 for this exchange. The policy of the...
-
Jane and Joe get divorced and as part of the divorce decree, Jane agrees to pay Joe $20,000 a year in alimony. What are the tax implications to Joe? Are there any tax implications to Jane with...
-
The text discusses some of the factors necessary for a bargaining cooperative to be effective.Read or skim the "Next Big Thing" in the Rural Cooperative magazine edition on Canvas. Which of the...
-
Please reflect on your experiences with COUN 501 microskills group. Share your experience in your microskills group related to unresolved personal issues that were triggered within the group. 2....
-
Find what you believe is an effective video/oral or oral marketing ad on the web. Provide the link as a part of this response. Utilizing concepts of marketing as context, provide your thoughts as to...
-
How do corporations make financial disclosures about the corporation at the end of the financial year? Who benefits from this disclosure? At the end of the financial year, a corporation has to make a...
-
The importance of effective management and leadership in the context of modern business practices and operations. Why are these principles and characteristics so important to the success of a...
-
- A particle of mass, 'm=4' moves along the x-axis under the influence of the potential V(x)= **] if the particle oscillates with -2e small amplitude around the minimum potential, what is the period...
-
Hardin Services Co. experienced the following events in 2016: 1. Provided services on account. 2. Collected cash for accounts receivable. 3. Attempted to collect an account and, when unsuccessful,...
-
AgriPro, a farm corporation, produced 20,000 bushels of corn in its first year of operations. During the year, it sold 15,000 bushels of the corn produced for $3.00 per bushel and collected 80% of...
-
Utica Companys net accounts receivable was $250,000 at December 31, 2013, and $300,000 at December 31, 2014. Net cash sales for 2014 were $100,000. The accounts receivable turnover for 2014 was 5.0,...
-
On July 1, 2014, McVay Corporation issued $15 million of 10-year bonds with an 8% stated interest rate. The bonds pay interest semiannually on June 30 and December 31 of each year. The market rate of...
-
Use SecureRandom method ints to generate a stream of 50 random numbers in the range 1 to 999, then filter the resulting stream elements to select only the odd numbers and display the results in...
-
What percentage of the 9,449 survey respondents live in the Eastern part of the county?
-
(a) What percentage of those not completing high school were females? (b) What percentage of those not completing high school were males? (c) What percentage of those completing high school were...
Study smarter with the SolutionInn App