Question
NovakLtd. issued a $878,000, 10-year bond dated January 1, 2020. The bond was sold to yield 12% effective interest. The bond paid 10% interest on
NovakLtd. issued a $878,000, 10-year bond dated January 1, 2020. The bond was sold to yield 12% effective interest. The bond paid 10% interest on January 1 and July 1 each year. The companys year-end was December 31, and Novak followed IFRS. Using 1. factor Tables 2. a financial calculator, or 3. Excel function PV, calculate the amount received for the bond, and any discount or premium on the bond. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and final answers to 0 decimal places, e.g. 5,275.)
Proceeds from sale of bond | $ | ||
Discount or Premium on bond | $ |
Prepare the journal entries for above transactions. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Date | Account Titles and Explanation | Debit | Credit |
January 1, 2020 or July 1, 2020 or December 31, 2020 or January 1, 2021 | |||
January 1, 2020 or July 1, 2020 or December 31, 2020 or January 1, 2021 | |||
January 1, 2020 or July 1, 2020 or December 31, 2020 or January 1, 2021 | |||
January 1, 2020 or July 1, 2020 or December 31, 2020 or January 1, 2021 | |||
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