Question
1. Solar Energy Inc. issued a $903,000, 6.5%, five-year bond on October 1, 2020. Interest is paid annually each October 1. Solars year-end is December
1.
Solar Energy Inc. issued a $903,000, 6.5%, five-year bond on October 1, 2020. Interest is paid annually each October 1. Solars year-end is December 31.
Period Ending | Cash Interest Paid | Period Interest Expense | Discount Amort. | Unamortized Discount | Carrying Value | |||||||||||||||||||||
Oct. 1/20 | $ | 36,534 | $ | 866,466 | ||||||||||||||||||||||
Oct. 1/21 | $ | 58,695 | $ | 64,985 | $ | 6,290 | 30,244 | 872,756 | ||||||||||||||||||
Oct. 1/22 | 58,695 | 65,457 | 6,762 | 23,483 | 879,517 | |||||||||||||||||||||
Oct. 1/23 | 58,695 | 65,964 | 7,269 | 16,214 | 886,786 | |||||||||||||||||||||
Oct. 1/24 | 58,695 | 66,509 | 7,814 | 8,400 | 894,600 | |||||||||||||||||||||
Oct. 1/25 | 58,695 | 67,095 | 8,400 | 0 | 903,000 | |||||||||||||||||||||
$ | 293,475 | $ | 330,010 | $ | 36,535 | |||||||||||||||||||||
Assume that interest has already been paid on October 1, 2023. Required: Using the amortization schedule provided above, record the entry to retire the bonds on October 1, 2023, for cash of:
- $882,500
- $886,786
- $889,900
Question 2- On March 1, 2020, Quinto Mining Inc. issued a $510,000, 11%, three-year bond. Interest is payable semiannually beginning September 1, 2020.
a. Calculate the bond issue price assuming a market interest rate of 10% on the date of issue. (Do not round intermediate calculations. Round the final answer to nearest whole dollar.)
b. Using the effective interest method, prepare an amortization schedule. (Do not round intermediate calculations. Round the final answers to nearest whole dollar. Enter all the amounts as positive values.)
c. Record the entries for the issuance of the bond on March 1, the adjusting entry to accrue bond interest and related amortization on April 30, 2020, Quintos year-end, and the payment of interest on September 1, 2020. (Do not round intermediate calculations. Round the final answers to nearest whole dollar.)
Part 2 a. Calculate the bond issue price assuming a market interest rate of 12.0% on the date of issue. (Do not round intermediate calculations. Round the final answer to nearest whole dollar.)
b. Using the effective interest method, prepare an amortization schedule. (Do not round intermediate calculations. Round the final answers to nearest whole dollar. Enter all the amounts as positive values.)
c. Record the entries for the issuance of the bond on March 1; the adjusting entry to accrue bond interest and related amortization on April 30, 2020, Quintos year-end; and the payment of interest on September 1, 2020.
d. Record the entries for the retirement of 30% of the bonds at 102, on September 1, 2020, after the interest payment.
I already get an answer till Part 2 section A in Chegg. (You can see in chegg if you have access to a more clear question.) I just need and of part 2b part c and part D. Thanks so very much form all your help. I appreciate this. Thank you.
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