Stressless, Inc. is authorized to issue 5%, 10-year bonds payable. On January 1, 2024, when the market
Question:
Stressless, Inc. is authorized to issue 5%, 10-year bonds payable. On January 1, 2024, when the market interest rate is 12%,the company issues $500,000 of the bonds. The bonds pay interest semiannually.
Present Value of $1 | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Periods | 1% | 2% | 3% | 4% | 5% | 6% | 7% | 8% | 9% | 10% | 12% | 14% | 15% | 16% | 18% | 20% |
Period 1 | 0.990 | 0.980 | 0.971 | 0.962 | 0.952 | 0.943 | 0.935 | 0.926 | 0.917 | 0.909 | 0.893 | 0.877 | 0.870 | 0.862 | 0.847 | 0.833 |
Period 2 | 0.980 | 0.961 | 0.943 | 0.925 | 0.907 | 0.890 | 0.873 | 0.857 | 0.842 | 0.826 | 0.797 | 0.769 | 0.756 | 0.743 | 0.718 | 0.694 |
Period 3 | 0.971 | 0.942 | 0.915 | 0.889 | 0.864 | 0.840 | 0.816 | 0.794 | 0.772 | 0.751 | 0.712 | 0.675 | 0.658 | 0.641 | 0.609 | 0.579 |
Period 4 | 0.961 | 0.924 | 0.888 | 0.855 | 0.823 | 0.792 | 0.763 | 0.735 | 0.708 | 0.683 | 0.636 | 0.592 | 0.572 | 0.552 | 0.516 | 0.482 |
Period 5 | 0.951 | 0.906 | 0.863 | 0.822 | 0.784 | 0.747 | 0.713 | 0.681 | 0.650 | 0.621 | 0.567 | 0.519 | 0.497 | 0.476 | 0.437 | 0.402 |
Period 6 | 0.942 | 0.888 | 0.837 | 0.790 | 0.746 | 0.705 | 0.666 | 0.630 | 0.596 | 0.564 | 0.507 | 0.456 | 0.432 | 0.410 | 0.370 | 0.335 |
Period 7 | 0.933 | 0.871 | 0.813 | 0.760 | 0.711 | 0.665 | 0.623 | 0.583 | 0.547 | 0.513 | 0.452 | 0.400 | 0.376 | 0.354 | 0.314 | 0.279 |
Period 8 | 0.923 | 0.853 | 0.789 | 0.731 | 0.677 | 0.627 | 0.582 | 0.540 | 0.502 | 0.467 | 0.404 | 0.351 | 0.327 | 0.305 | 0.266 | 0.233 |
Period 9 | 0.914 | 0.837 | 0.766 | 0.703 | 0.645 | 0.592 | 0.544 | 0.500 | 0.460 | 0.424 | 0.361 | 0.308 | 0.284 | 0.263 | 0.225 | 0.194 |
Period 10 | 0.905 | 0.820 | 0.744 | 0.676 | 0.614 | 0.558 | 0.508 | 0.463 | 0.422 | 0.386 | 0.322 | 0.270 | 0.247 | 0.227 | 0.191 | 0.162 |
Period 11 | 0.896 | 0.804 | 0.722 | 0.650 | 0.585 | 0.527 | 0.475 | 0.429 | 0.388 | 0.350 | 0.287 | 0.237 | 0.215 | 0.195 | 0.162 | 0.135 |
Period 12 | 0.887 | 0.788 | 0.701 | 0.625 | 0.557 | 0.497 | 0.444 | 0.397 | 0.356 | 0.319 | 0.257 | 0.208 | 0.187 | 0.168 | 0.137 | 0.112 |
Period 13 | 0.879 | 0.773 | 0.681 | 0.601 | 0.530 | 0.469 | 0.415 | 0.368 | 0.326 | 0.290 | 0.229 | 0.182 | 0.163 | 0.145 | 0.116 | 0.093 |
Period 14 | 0.870 | 0.758 | 0.661 | 0.577 | 0.505 | 0.442 | 0.388 | 0.340 | 0.299 | 0.263 | 0.205 | 0.160 | 0.141 | 0.125 | 0.099 | 0.078 |
Period 15 | 0.861 | 0.743 | 0.642 | 0.555 | 0.481 | 0.417 | 0.362 | 0.315 | 0.275 | 0.239 | 0.183 | 0.140 | 0.123 | 0.108 | 0.084 | 0.065 |
Period 16 | 0.853 | 0.728 | 0.623 | 0.534 | 0.458 | 0.394 | 0.339 | 0.292 | 0.252 | 0.218 | 0.163 | 0.123 | 0.107 | 0.093 | 0.071 | 0.054 |
Period 17 | 0.844 | 0.714 | 0.605 | 0.513 | 0.436 | 0.371 | 0.317 | 0.270 | 0.231 | 0.198 | 0.146 | 0.108 | 0.093 | 0.080 | 0.060 | 0.045 |
Period 18 | 0.836 | 0.700 | 0.587 | 0.494 | 0.416 | 0.350 | 0.296 | 0.250 | 0.212 | 0.180 | 0.130 | 0.095 | 0.081 | 0.069 | 0.051 | 0.038 |
Period 19 | 0.828 | 0.686 | 0.570 | 0.475 | 0.396 | 0.331 | 0.277 | 0.232 | 0.194 | 0.164 | 0.116 | 0.083 | 0.070 | 0.060 | 0.043 | 0.031 |
Period 20 | 0.820 | 0.673 | 0.554 | 0.456 | 0.377 | 0.312 | 0.258 | 0.215 | 0.178 | 0.149 | 0.104 | 0.073 | 0.061 | 0.051 | 0.037 | 0.026 |
Period 21 | 0.811 | 0.660 | 0.538 | 0.439 | 0.359 | 0.294 | 0.242 | 0.199 | 0.164 | 0.135 | 0.093 | 0.064 | 0.053 | 0.044 | 0.031 | 0.022 |
Period 22 | 0.803 | 0.647 | 0.522 | 0.422 | 0.342 | 0.278 | 0.226 | 0.184 | 0.150 | 0.123 | 0.083 | 0.056 | 0.046 | 0.038 | 0.026 | 0.018 |
Period 23 | 0.795 | 0.634 | 0.507 | 0.406 | 0.326 | 0.262 | 0.211 | 0.170 | 0.138 | 0.112 | 0.074 | 0.049 | 0.040 | 0.033 | 0.022 | 0.015 |
Period 24 | 0.788 | 0.622 | 0.492 | 0.390 | 0.310 | 0.247 | 0.197 | 0.158 | 0.126 | 0.102 | 0.066 | 0.043 | 0.035 | 0.028 | 0.019 | 0.013 |
Period 25 | 0.780 | 0.610 | 0.478 | 0.375 | 0.295 | 0.233 | 0.184 | 0.146 | 0.116 | 0.092 | 0.059 | 0.038 | 0.030 | 0.024 | 0.016 | 0.010 |
Period 26 | 0.772 | 0.598 | 0.464 | 0.361 | 0.281 | 0.220 | 0.172 | 0.135 | 0.106 | 0.084 | 0.053 | 0.033 | 0.026 | 0.021 | 0.014 | 0.009 |
Period 27 | 0.764 | 0.586 | 0.450 | 0.347 | 0.268 | 0.207 | 0.161 | 0.125 | 0.098 | 0.076 | 0.047 | 0.029 | 0.023 | 0.018 | 0.011 | 0.007 |
Period 28 | 0.757 | 0.574 | 0.437 | 0.333 | 0.255 | 0.196 | 0.150 | 0.116 | 0.090 | 0.069 | 0.042 | 0.026 | 0.020 | 0.016 | 0.010 | 0.006 |
Period 29 | 0.749 | 0.563 | 0.424 | 0.321 | 0.243 | 0.185 | 0.141 | 0.107 | 0.082 | 0.063 | 0.037 | 0.022 | 0.017 | 0.014 | 0.008 | 0.005 |
Period 30 | 0.742 | 0.552 | 0.412 | 0.308 | 0.231 | 0.174 | 0.131 | 0.099 | 0.075 | 0.057 | 0.033 | 0.020 | 0.015 | 0.012 | 0.007 | 0.004 |
Period 40 | 0.672 | 0.453 | 0.307 | 0.208 | 0.142 | 0.097 | 0.067 | 0.046 | 0.032 | 0.022 | 0.011 | 0.005 | 0.004 | 0.003 | 0.001 | 0.001 |
Period 50 | 0.608 | 0.372 | 0.228 | 0.141 | 0.087 | 0.054 | 0.034 | 0.021 | 0.013 | 0.009 | 0.003 | 0.001 | 0.001 | 0.001 |
Present Value of Ordinary Annuity of $1 | ||||||||||||||||
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Periods | 1% | 2% | 3% | 4% | 5% | 6% | 7% | 8% | 9% | 10% | 12% | 14% | 15% | 16% | 18% | 20% |
Period 1 | 0.990 | 0.980 | 0.971 | 0.962 | 0.952 | 0.943 | 0.935 | 0.926 | 0.917 | 0.909 | 0.893 | 0.877 | 0.870 | 0.862 | 0.847 | 0.833 |
Period 2 | 1.970 | 1.942 | 1.913 | 1.886 | 1.859 | 1.833 | 1.808 | 1.783 | 1.759 | 1.736 | 1.690 | 1.647 | 1.626 | 1.605 | 1.566 | 1.528 |
Period 3 | 2.941 | 2.884 | 2.829 | 2.775 | 2.723 | 2.673 | 2.624 | 2.577 | 2.531 | 2.487 | 2.402 | 2.322 | 2.283 | 2.246 | 2.174 | 2.106 |
Period 4 | 3.902 | 3.808 | 3.717 | 3.630 | 3.546 | 3.465 | 3.387 | 3.312 | 3.240 | 3.170 | 3.037 | 2.914 | 2.855 | 2.798 | 2.690 | 2.589 |
Period 5 | 4.853 | 4.713 | 4.580 | 4.452 | 4.329 | 4.212 | 4.100 | 3.993 | 3.890 | 3.791 | 3.605 | 3.433 | 3.352 | 3.274 | 3.127 | 2.991 |
Period 6 | 5.795 | 5.601 | 5.417 | 5.242 | 5.076 | 4.917 | 4.767 | 4.623 | 4.486 | 4.355 | 4.111 | 3.889 | 3.784 | 3.685 | 3.498 | 3.326 |
Period 7 | 6.728 | 6.472 | 6.230 | 6.002 | 5.786 | 5.582 | 5.389 | 5.206 | 5.033 | 4.868 | 4.564 | 4.288 | 4.160 | 4.039 | 3.812 | 3.605 |
Period 8 | 7.652 | 7.325 | 7.020 | 6.733 | 6.463 | 6.210 | 5.971 | 5.747 | 5.535 | 5.335 | 4.968 | 4.639 | 4.487 | 4.344 | 4.078 | 3.837 |
Period 9 | 8.566 | 8.162 | 7.786 | 7.435 | 7.108 | 6.802 | 6.515 | 6.247 | 5.995 | 5.759 | 5.328 | 4.946 | 4.772 | 4.607 | 4.303 | 4.031 |
Period 10 | 9.471 | 8.983 | 8.530 | 8.111 | 7.722 | 7.360 | 7.024 | 6.710 | 6.418 | 6.145 | 5.650 | 5.216 | 5.019 | 4.833 | 4.494 | 4.192 |
Period 11 | 10.368 | 9.787 | 9.253 | 8.760 | 8.306 | 7.887 | 7.499 | 7.139 | 6.805 | 6.495 | 5.938 | 5.453 | 5.234 | 5.029 | 4.656 | 4.327 |
Period 12 | 11.255 | 10.575 | 9.954 | 9.385 | 8.863 | 8.384 | 7.943 | 7.536 | 7.161 | 6.814 | 6.194 | 5.660 | 5.421 | 5.197 | 4.793 | 4.439 |
Period 13 | 12.134 | 11.348 | 10.635 | 9.986 | 9.394 | 8.853 | 8.358 | 7.904 | 7.487 | 7.103 | 6.424 | 5.842 | 5.583 | 5.342 | 4.910 | 4.533 |
Period 14 | 13.004 | 12.106 | 11.296 | 10.563 | 9.899 | 9.295 | 8.745 | 8.244 | 7.786 | 7.367 | 6.628 | 6.002 | 5.724 | 5.468 | 5.008 | 4.611 |
Period 15 | 13.865 | 12.849 | 11.938 | 11.118 | 10.380 | 9.712 | 9.108 | 8.559 | 8.061 | 7.606 | 6.811 | 6.142 | 5.847 | 5.575 | 5.092 | 4.675 |
Period 16 | 14.718 | 13.578 | 12.561 | 11.652 | 10.838 | 10.106 | 9.447 | 8.851 | 8.313 | 7.824 | 6.974 | 6.265 | 5.954 | 5.669 | 5.162 | 4.730 |
Period 17 | 15.562 | 14.292 | 13.166 | 12.166 | 11.274 | 10.477 | 9.763 | 9.122 | 8.544 | 8.022 | 7.120 | 6.373 | 6.047 | 5.749 | 5.222 | 4.775 |
Period 18 | 16.398 | 14.992 | 13.754 | 12.659 | 11.690 | 10.828 | 10.059 | 9.372 | 8.756 | 8.201 | 7.250 | 6.467 | 6.128 | 5.818 | 5.273 | 4.812 |
Period 19 | 17.226 | 15.678 | 14.324 | 13.134 | 12.085 | 11.158 | 10.336 | 9.604 | 8.950 | 8.365 | 7.366 | 6.550 | 6.198 | 5.877 | 5.316 | 4.844 |
Period 20 | 18.046 | 16.351 | 14.877 | 13.590 | 12.462 | 11.470 | 10.594 | 9.818 | 9.129 | 8.514 | 7.469 | 6.623 | 6.259 | 5.929 | 5.353 | 4.870 |
Period 21 | 18.857 | 17.011 | 15.415 | 14.029 | 12.821 | 11.764 | 10.836 | 10.017 | 9.292 | 8.649 | 7.562 | 6.687 | 6.312 | 5.973 | 5.384 | 4.891 |
Period 22 | 19.660 | 17.658 | 15.937 | 14.451 | 13.163 | 12.042 | 11.061 | 10.201 | 9.442 | 8.772 | 7.645 | 6.743 | 6.359 | 6.011 | 5.410 | 4.909 |
Period 23 | 20.456 | 18.292 | 16.444 | 14.857 | 13.489 | 12.303 | 11.272 | 10.371 | 9.580 | 8.883 | 7.718 | 6.792 | 6.399 | 6.044 | 5.432 | 4.925 |
Period 24 | 21.243 | 18.914 | 16.936 | 15.247 | 13.799 | 12.550 | 11.469 | 10.529 | 9.707 | 8.985 | 7.784 | 6.835 | 6.434 | 6.073 | 5.451 | 4.937 |
Period 25 | 22.023 | 19.523 | 17.413 | 15.622 | 14.094 | 12.783 | 11.654 | 10.675 | 9.823 | 9.077 | 7.843 | 6.873 | 6.464 | 6.097 | 5.467 | 4.948 |
Period 26 | 22.795 | 20.121 | 17.877 | 15.983 | 14.375 | 13.003 | 11.826 | 10.810 | 9.929 | 9.161 | 7.896 | 6.906 | 6.491 | 6.118 | 5.480 | 4.956 |
Period 27 | 23.560 | 20.707 | 18.327 | 16.330 | 14.643 | 13.211 | 11.987 | 10.935 | 10.027 | 9.237 | 7.943 | 6.935 | 6.514 | 6.136 | 5.492 | 4.964 |
Period 28 | 24.316 | 21.281 | 18.764 | 16.663 | 14.898 | 13.406 | 12.137 | 11.051 | 10.116 | 9.307 | 7.984 | 6.961 | 6.534 | 6.152 | 5.502 | 4.970 |
Period 29 | 25.066 | 21.844 | 19.188 | 16.984 | 15.141 | 13.591 | 12.278 | 11.158 | 10.198 | 9.370 | 8.022 | 6.983 | 6.551 | 6.166 | 5.510 | 4.975 |
Period 30 | 25.808 | 22.396 | 19.600 | 17.292 | 15.372 | 13.765 | 12.409 | 11.258 | 10.274 | 9.427 | 8.055 | 7.003 | 6.566 | 6.177 | 5.517 | 4.979 |
Period 40 | 32.835 | 27.355 | 23.115 | 19.793 | 17.159 | 15.046 | 13.332 | 11.925 | 10.757 | 9.779 | 8.244 | 7.105 | 6.642 | 6.233 | 5.548 | 4.997 |
Period 50 | 39.196 | 31.424 | 25.730 | 21.482 | 18.256 | 15.762 | 13.801 | 12.233 | 10.962 | 9.915 | 8.304 | 7.133 | 6.661 | 6.246 | 5.554 | 4.999 |
Requirement 1. How much cash did the company receive upon issuance of the bonds payable? (Round to the nearest dollar.)
Upon issuance of the bonds payable, the company received |
Requirement 2. Prepare an amortization table for the bond us
ing the effective-interest method, through the first two interest payments. (Round to the nearest dollar.)
Interest | Carrying | |||
Cash Paid | Expense | Amortized | Amount | |
01/01/2024 | ||||
06/30/2024 | ||||
12/31/2024 |
Part 3Requirement 3. Journalize the issuance of the bonds on January 1,
2024,
and the first and second payments of the semiannual interest amount and amortization of the bonds on June 30,
2024
and December 31,
2024.
Explanations are not required. (Record debits first, then credits. Exclude explanations from any journal entries.)Journalize the issuance of the bonds.
Date | Accounts | Debit | Credit | ||
2024 | |||||
Jan. 1 | |||||
Part 4Journalize the payment of the first semiannual interest amount and amortization of the bond on June 30,
2024.
Date | Accounts | Debit | Credit | ||
2024 | |||||
Jun. 30 | |||||
Part 5Journalize the payment of the second semiannual interest amount and amortization of the bond on December 31,
2024.
Date | Accounts | Debit | Credit | ||
2024 | |||||
Dec. 31 | |||||
Horngrens Accounting The Financial Chapters
ISBN: 9780136162186
13th Edition
Authors: Tracie Miller Nobles, Brenda Mattison