Mays Inc. issued $1,300,000 of 6 percent, 10-year bonds payable and received cash proceeds of $1,208,207...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Mays Inc. issued $1,300,000 of 6 percent, 10-year bonds payable and received cash proceeds of $1,208,207 on March 31, 2020. The market interest rate at the date of issuance was 7 percent, and the bonds pay interest semi-annually a. Did the bonds sel at a premium or a discount? b. Prepare an effective-interest amortization table for the bond discount through the first two interest payments c. Record Mays Inc.'s issuance of the bonds on March 31, 2020, and payment of the first semi-annual interest amount and amortization of the bond discount on September 30, 2020. d. If we were to amortize the bond discount using the straight-line method instead of the effective-interest method, record the first interest amortization entry On January 1, 2020, ABC Company purchases a vehicle and signs a six-year loan for $45,000 at 4.5 percent. a. Complete the partial amortization schedule assuming they will make a blended monthly payment of $760.00. b. At the end of 2020, what amount would be shown on the balance sheet for the current portion of the loan? Blended Beginning Monthly Loan Interest Principal Ending Period Balance Payment Expense Payment Balance Jan. 1, 2020 $ 45,000.00 Jan. 31, 2020 Feb. 29, 2021 Mar. 31, 2021 Apr. 30, 2021 May 31, 2021 Jun. 30, 2021 Mays Inc. issued $1,300,000 of 6 percent, 10-year bonds payable and received cash proceeds of $1,208,207 on March 31, 2020. The market interest rate at the date of issuance was 7 percent, and the bonds pay interest semi-annually a. Did the bonds sel at a premium or a discount? b. Prepare an effective-interest amortization table for the bond discount through the first two interest payments c. Record Mays Inc.'s issuance of the bonds on March 31, 2020, and payment of the first semi-annual interest amount and amortization of the bond discount on September 30, 2020. d. If we were to amortize the bond discount using the straight-line method instead of the effective-interest method, record the first interest amortization entry On January 1, 2020, ABC Company purchases a vehicle and signs a six-year loan for $45,000 at 4.5 percent. a. Complete the partial amortization schedule assuming they will make a blended monthly payment of $760.00. b. At the end of 2020, what amount would be shown on the balance sheet for the current portion of the loan? Blended Beginning Monthly Loan Interest Principal Ending Period Balance Payment Expense Payment Balance Jan. 1, 2020 $ 45,000.00 Jan. 31, 2020 Feb. 29, 2021 Mar. 31, 2021 Apr. 30, 2021 May 31, 2021 Jun. 30, 2021
Expert Answer:
Answer rating: 100% (QA)
Part a The Bonds are issued at DISCOUNT as the Issue Price is lower than the Face value of Bond Disc... View the full answer
Related Book For
Fundamentals of Financial Accounting
ISBN: 978-0078025914
5th edition
Authors: Fred Phillips, Robert Libby, Patricia Libby
Posted Date:
Students also viewed these accounting questions
-
On June 30, 2010, the market interest rate is 4%. Score Sports Ltd. issues $800,000 of 5%, 30-year bonds payable at 117.38. The bonds pay interest on June 30 and December 31. Score Sports Ltd....
-
On June 30, 2010, the market interest rate is 9%. Team Sports Ltd. issues $3,200,000 of 10%, 10-year bonds payable at 106.5. The bonds pay interest on June 30 and December 31. Team Sports Ltd....
-
On June 30, 2012, the market interest rate is 8%. First Place Sports Ltd. issues $4,000,000 of 9%, 20-year bonds payable at a price of 109.895. The bonds pay interest on June 30 and December 31....
-
A specific purpose statement is not stated in the speech but includes both the general purpose and the topic. It often reveals the intended goal for the audience. O True False
-
Gordon Bethunes approach to salvaging Continental seems almost too good to be true. Surely he has shown some management flaws or missteps? What could he have done better? Your recommendations please.
-
A researcher collected data from 198 people about their political leaning and whether they would favor reinstating the assault weapons ban. For the following cross-tabulation, calculate chi-square...
-
Economic order quantity; order cost; carrying cost Liberty Company predicts that it will use 360,000 units of material during the year. The material is expected to cost $5 per unit. Liberty...
-
The adjusted trial balance for Burlington Advertising Services is presented below: Requirements 1. Prepare the income statement for the year ending December 31, 2016. 2. Prepare the statement of...
-
QUESTION 4 Let f (:3, y) = 11:2 2:cy+y2. Find the maximum and minimum values of f subject to the constraint 32 + 4y2 = 20. Be sure to specify the points at which these values are obtained
-
2. The Global Tea and Organic Juice companies have merged. The following information has been collected for the "Consolidation Project." Chapter 7 Managing Risk 245 Activity Description Predecessor a...
-
Explain the Bullwhip Effect and provide background, an overview, and an example of a firm that either has or has overcome your assigned obstacle. Please provide references, thank you.
-
Warren Boyd, a beginning staff accountant, believes that audit sampling applies only to tests of controls, but may be used with all auditing procedures relating to tests of controls. Is Warren...
-
What is the format of the operating activities section of the statement of cash flows using the indirect method?
-
a. Define an attribute of interest. b. What evidence should exist for attributes?
-
What is the format of the operating activities section of the statement of cash flows using the direct method?
-
a. State the steps in a sampling plan for tests of controls. b. Identify the phases of an audit to which each step applies.
-
Studying and understanding personality helps us work more effectively with our learners and coworkers True False
-
Explain the term global capital markets. This chapter primarily discusses global equity markets. What other types of financial instruments are traded in these markets? How important are global...
-
Bogscraft Company has outstanding 60,000 shares of $ 10 par value common stock and 25,000 shares of $ 20 par value preferred stock (8 percent). On February 1, the board of directors voted in favor of...
-
Prepare journal entries to record these transactions: (a) Morrell Corporation disposed of two computers at the end of their useful lives. The computers had cost $ 4,800 and their Accumulated...
-
Refer to E2-4. a. Received $ 10,000 cash from owners and issued stock to them. b. Borrowed $ 7,000 cash from a bank and signed a note due later this year. c. Bought and received $ 800 of equipment on...
-
What is the proper accounting and reporting of bonds payable. (See pp. 482484.)
-
What are the components of the long-term liability of the balance sheet? (See pp. 480481.)
-
Bonds usually pay interest a. only at the due date of the bond. b. monthly. c. either annually or semiannually. d. at the time of issuance.
Study smarter with the SolutionInn App