Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Just need help with parts 1-4 Thank you in advance Texxon Corporation issued $400,000 of 20-year bonds with a payment rate of 12% payments are

Just need help with parts 1-4 Thank you in advance image text in transcribed
Texxon Corporation issued $400,000 of 20-year bonds with a payment rate of 12% payments are made semiannually, Assume that the market interest rate for similar investments is 10%, compounded semiannually. What is the semi-annual cash payment amount for this bond issue? a. S40,000 b. $48.000 c. $24,000 d. $20,000 2 What is the present value (issue price) of this bond issue at the market rate of interest? a. S411,816 b. $399,800 e. S 56,800 d. S468.616 3. How much bond interest expense should be recorded on the first semi-annual interest payment date? a. S20.569.20 b. $23.430.80 c. $24,000.00 d. S20,000.00 These bonds would be issued at a premium (.e.. your answer to #2 should be more than $400,000). What amount of premium will be amortized on the first semi- annual interest payment date? a $589.32 b. $569.20 c. $430.80 d. S623.40 s What is the carrying value of the bonds after the first semi- annual interest payment date? a. $400,000.00 h. $411,816.00 c. $432,756,00 d. S468,046.80 6. The journal entry that would be made to record the issue of these bonds would include: a. a credit to cash for $400,000 b. a debit to Bonds Payable for $400,000 c. a credit to Premium on Bonds Payable for $36,800 d. a credit to Premium on Bonds Payable for $68.616 7. The journal entry that would be made when the first payment is made to the bondholders would include: a a debit to Cash for $24,000.00 b. a debit to Interest Expense for $23.430.80 c. a credit to Discount on Bonds Payable for S569.20 d. a debit to Bonds Payable for $24,000.00

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_2

Step: 3

blur-text-image_3

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

Interpreting And Analyzing Financial Statements

Authors: Karen P. Schoenebeck

3rd Edition

0130082163, 9780130082169

More Books

Students also viewed these Accounting questions

Question

Discuss the four phases of international marketing involvement.

Answered: 1 week ago