Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. Queen Energy Inc issued bonds on January 1, 2020 , that pay interest semiannually on June 30 and December 31 The par value of

image text in transcribed
image text in transcribed
1. Queen Energy Inc issued bonds on January 1, 2020 , that pay interest semiannually on June 30 and December 31 The par value of the bonds is $ 240,000 , the annual contract rate is 8% , and the bonds mature in 10 years ( Use TABLE 14A1 and TABLE 14A 21 ( Use appropriate factor ( s ) from the tables provided ) Required : a - For each of these three situations,, determine the issue price of the bonds . ( Do not round intermediate calculations . Round the final answers to the nearest whole dollar, ) For each of these three situations , prepare the journal entry that would record the issuance, assuming the market interest rate at the date of issuance was ( 1) 6% , ( 2) 8% , ( 3 ) 10% ( Use PV tables in determining the issue price of the bonds . Do not round intermediate calculations, Round the final answers to the nearest whole dollar,) 3. On June 1 2020 , JetCom Inventors Inc issued a $ 480,000 8 % , three - year bond Interest is to be paid semiannually beginning December 1 , 2020 Required : a . Calculate the issue price of the bond assuming a market interest rate of 9 % { Do not round intermediate calculations . Round the final answer to the nearest whole dollar, ) b. Using the effective interest method, prepare an amortization schedule ( Do not round intermediate calculations . Round the final answers to the nearest whole dollar , Enter all the amounts as positive values, ) Part 1, Prepare journal entries to the following ( Do not round intermediate calculations . Round the final answers to the nearest whole dollar , ) a. Issuance of the bonds on June 1 2020 b . Payment of interest on December 1 2020 c Adjusting entry to accrue bond interest and discount amortization on January 31, 2021 d . Payment of interest on June 1 2021 Assume Jetcom Inventors Inc. has a January 31 year - end Part 2. Show how the bonds will appear on the balance sheet under non - current liabilities at January 31 , 2022 { Do not found intermediate calculations . Round the final answers to the nearest whole dollar )

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Principles

Authors: Jerry J. Weygandt, Paul D. Kimmel, Jill E. Mitchell

14th Edition

1119707110, 978-1119707110

More Books

Students also viewed these Accounting questions

Question

6. How can a message directly influence the interpreter?

Answered: 1 week ago