On January 1, 2011, Darnell Window and Pane issued $18 million of 10-year, zero-coupon bonds for $5,795,518.
Question:
Required:
1. Prepare the journal entry to record the bond issue.
2. Determine the effective rate of interest.
3. Prepare the journal entry to record annual interest expense at December 31, 2011.
4. Prepare the journal entry to record annual interest expense at December 31, 2012.
5. Prepare the journal entry to record the extinguishment at maturity.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 73% (15 reviews)
Requirement 1 Cash price given 5795518 Discount on bonds payable diffe...View the full answer
Answered By
Asim farooq
I have done MS finance and expertise in the field of Accounting, finance, cost accounting, security analysis and portfolio management and management, MS office is at my fingertips, I want my client to take advantage of my practical knowledge. I have been mentoring my client on a freelancer website from last two years, Currently I am working in Telecom company as a financial analyst and before that working as an accountant with Pepsi for one year. I also join a nonprofit organization as a finance assistant to my job duties are making payment to client after tax calculation, I have started my professional career from teaching I was teaching to a master's level student for two years in the evening.
My Expert Service
Financial accounting, Financial management, Cost accounting, Human resource management, Business communication and report writing. Financial accounting : • Journal entries • Financial statements including balance sheet, Profit & Loss account, Cash flow statement • Adjustment entries • Ratio analysis • Accounting concepts • Single entry accounting • Double entry accounting • Bills of exchange • Bank reconciliation statements Cost accounting : • Budgeting • Job order costing • Process costing • Cost of goods sold Financial management : • Capital budgeting • Net Present Value (NPV) • Internal Rate of Return (IRR) • Payback period • Discounted cash flows • Financial analysis • Capital assets pricing model • Simple interest, Compound interest & annuities
4.40+
65+ Reviews
86+ Question Solved
Related Book For
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
Question Posted:
Students also viewed these Accounting questions
-
On January 1, 2018, Darnell Window and Pane issued $18 million of 10-year, zero-coupon bonds for $5,795,518. Required: 1. Prepare the journal entry to record the bond issue. 2. Determine the...
-
On January 1, 2021, Darnell Window and Pane issued $18 million of 10-year, zero-coupon bonds for $5,795,518. Required: 1. Prepare the journal entry to record the bond issue. 2. Determine the...
-
Prepare the journal entry to record Channel One Companys issuance of 100,000 shares of $0.50 par value common stock assuming the shares sell for: a. $0.50 cash per share. b. $2 cash per share.
-
1. 3 2. MONEYBALL MOVIE WORKSHEET 1 1 1 11 6 7 1. Discuss the Oakland Athletics and what is going on with them? How are they look to change? What marketing techniques are being used to better the...
-
Draw a reaction-energy diagram for the propagation steps of the free-radical addition of HBr to isobutylene. Draw curves representing the reactions leading to both the Markovnikov and the...
-
Six-tenths coulomb passes a point in 3 s. What is the current in amperes?
-
What are the four stages of the litigation process?
-
Comparative income statements and balance sheets for Coca-Cola are shown below ($ millions). Required: a. Use the following ratios to prepare a projected income statement, balance sheet, and...
-
For an alternating series whose summands are decreasing in magnitude, the true sum S lies between any two successive partial sums: (*) min {SN, SN+1}
-
Solutions Plus is an industrial chemicals company that produces specialized cleaning fluids and solvents for a wide variety of applications. Solutions Plus just received an invitation to submit a bid...
-
The fiscal year ends December 31 for Lake Hamilton Development. To provide funding for its Moonlight Bay project, LHD issued 5% bonds with a face amount of $500,000 on November 1, 2011. The bonds...
-
At the beginning of the year, Lambert Motors issued the three notes described below. Interest is paid at year-end. 1. The company issued a two-year, 12%, $600,000 note in exchange for a tract of...
-
Why does the credit exposure on a matched pair of forward contracts resembles a straddle?
-
Define the relationship among a bonds price and its coupon rate, current yield, yield to maturity, and holding period return.
-
What is responsive listening?
-
Describe the special features and organization of the book.
-
Define effective listening .
-
Explain the relationship between bond pricing and present value.
-
In the United States, taxpayers in the top 1 percent of the income distribution pay about _________ percent of their income in federal taxes. a. 5 b. 10 c. 20 d. 30
-
Conduct a VRIO analysis by ranking Husson University (in Maine) business school in terms of the following six dimensions relative to the top three rival schools. If you were the dean with a limited...
-
What determines the bargaining range of a negotiation?
-
Mayfair Department Stores, Inc., operates over 30 retail stores in the Pacific Northwest. Prior to 2021, the company used the FIFO method to value its inventory. In 2021, Mayfair decided to switch to...
-
A fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2021. Accounting records on that date indicated the following: Merchandise inventory, January 1, 2021 .............$1,900,000...
-
[This is a variation of P 9?9, modified to focus on the dollar-value LIFO retail method.] Smith-Kline Company maintains inventory records at selling prices as well as at cost. For 2021, the records...
-
American Blossom management is planning to make a $3.7 million loan to a French firm. Currently, LIBOR is at 0.55 percent. American management considers a default risk premium of 1.10 percent, a...
-
The following account balances are for Ping Chung, Certified Public Accountant, as of April 30, 20X1. Cash Accounts receivable $120,000 48,000 Maintenance expense 21,400 Advertising expense 17,060...
-
Abbott Equipment leased a protein analyzer to Werner Chemical, Inc., on September 30, 2021. Abbott purchased the machine from NutraLabs, Inc., at a cost of $5 million. The five-year lease agreement...
Study smarter with the SolutionInn App