Bond Premium, Entries for Bonds Payable Transactions Rodgers Corporation produces and sells football equipment. On July 1 Year 1, Rodgers issued $65,000,000 of 10-year, 12% bonds at a market (effective) interest rate of 10%, receiving cash of $73,100,469. Interest on the bends is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all youmal entries with a compound transaction, if an amount box does not require an entry, leave it blank 1. Joumalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1. Year 1. Year 1 July 1 Cash 73.100.469 Premium on Bonds Payable 1,100.464 Bonds Payable 65,000,000 My W Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. The straight-line method of amortization provides equal amounts of amortization over the life of the bond Learning Objective 2 2. Journalize the entries to record the following: The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight line method (Round to the nearest dollar) 2. Journalize the entries to record the following: a. The first semiannual Interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) Year 1 Dec. 31 Interest Expense 3.019,953 Premium on Bonds Payable $10,047 Cash 3.900.000 b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar) Year 2 June 30 Interest Expense 39,953 Premium on Bonds Payable $10,047 Cash 3.000.000 3. Determine the total interest expense for Year 1. Round to the nearest dollar. 6,179,906 X 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? Yes S. Compute the price of 73,100,469 received for the bonds by using the present value tables Exhibit S and Exhibit 7. Present value of the face amount 24,498,500 x Present value of the semi-annual interest payments 48,602,580 X Price received for the bonds 73,101,080 X Bond Premium, Entries for Bonds Payable Transactions Rodgers Corporation produces and sells football equipment. On July 1 Year 1, Rodgers issued $65,000,000 of 10-year, 12% bonds at a market (effective) interest rate of 10%, receiving cash of $73,100,469. Interest on the bends is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all youmal entries with a compound transaction, if an amount box does not require an entry, leave it blank 1. Joumalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1. Year 1. Year 1 July 1 Cash 73.100.469 Premium on Bonds Payable 1,100.464 Bonds Payable 65,000,000 My W Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. The straight-line method of amortization provides equal amounts of amortization over the life of the bond Learning Objective 2 2. Journalize the entries to record the following: The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight line method (Round to the nearest dollar) 2. Journalize the entries to record the following: a. The first semiannual Interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) Year 1 Dec. 31 Interest Expense 3.019,953 Premium on Bonds Payable $10,047 Cash 3.900.000 b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar) Year 2 June 30 Interest Expense 39,953 Premium on Bonds Payable $10,047 Cash 3.000.000 3. Determine the total interest expense for Year 1. Round to the nearest dollar. 6,179,906 X 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? Yes S. Compute the price of 73,100,469 received for the bonds by using the present value tables Exhibit S and Exhibit 7. Present value of the face amount 24,498,500 x Present value of the semi-annual interest payments 48,602,580 X Price received for the bonds 73,101,080 X
