On February 1, 2021, Cromley Motor Products Issued 6% bonds, dated February 1, with a face...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On February 1, 2021, Cromley Motor Products Issued 6% bonds, dated February 1, with a face amount of $55 million. The bonds mature on January 31, 2025 (4 years). The market yield for bonds of similar risk and maturity was 8%. Interest is paid semiannually on July 31 and January 31. Barnwell Industries acquired $55,000 of the bonds as a long- term Investment. The fiscal years of both firms end December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price of the bonds issued on February 1, 2021. 2-a. Prepare amortization schedules that Indicate Cromley's effective interest expense for each Interest period during the term to maturity. 2-b. Prepare amortization schedules that Indicate Barnwell's effective interest revenue for each Interest period during the term to maturity. 3. Prepare the journal entries to record the Issuance of the bonds by Cromley and Barnwell's Investment on February 1, 2021. 4. Prepare the journal entries by both firms to record all subsequent events related to the bonds through January 31, 2023. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 28 Req 3 Req 4 Cromley Req 4 Barnwell On February 1, 2021, Cromley Motor Products Issued 6% bonds, dated February 1, with a face amount of $55 million. The bonds mature on January 31, 2025 (4 years). The market yield for bonds of similar risk and maturity was 8%. Interest is paid semiannually on July 31 and January 31. Barnwell Industries acquired $55,000 of the bonds as a long- term Investment. The fiscal years of both firms end December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price of the bonds issued on February 1, 2021. 2-a. Prepare amortization schedules that Indicate Cromley's effective interest expense for each Interest period during the term to maturity. 2-b. Prepare amortization schedules that Indicate Barnwell's effective interest revenue for each Interest period during the term to maturity. 3. Prepare the journal entries to record the Issuance of the bonds by Cromley and Barnwell's Investment on February 1, 2021. 4. Prepare the journal entries by both firms to record all subsequent events related to the bonds through January 31, 2023. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 28 Req 3 Req 4 Cromley Req 4 Barnwell
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
Show that for the situations in Figures a and b, the object oscillates with a frequency f = [1/(2)] k eff /m, where k eff is given by (a) k eff = k 1 + k 2 and (b) 1/k eff = 1/k 1 + 1/k 2 . Ammim...
-
The Sarbanes-Oxley Act contains many sections. Which sections are the focus of this chapter?
-
Jesper Parnevik borrowed $70,000 on March 1, 2006. This amount plus accrued interest at 12% compounded semiannually is to be repaid March 1, 2016. To retire this debt, Jesper plans to contribute to a...
-
Suppose that x and y are related by the equation 4x2 y2 = 4 and use implicit differentiation to determine dy dx dy
-
Shareholder A is the sole shareholder in S Corporation, an S Corporation. On January 1 of the tax year specified for the exam, A's basis is $70,000. During that same year, the corporation has...
-
Assume the value of kP, Cp and the length (L) of the 2D slab. Calculate the temperature distribution analytically and plot the graph for T Vs X showing the temperature distribution on the slab using...
-
2. Suppose that we wanted to block access to the sea from inland town s on a river. We can do this by dropping mines in the river, but because the river spreads out in a wide delta with several...
-
Given the following block diagram r(t) 1/m K c(t) derive the differential equation relating the output c(t) to the input r(t)
-
A manufacturing process involves a force being applied to an mass-spring system. The force follows the function: F(t)=-0.5t + 3t+2+5e-t function. t>= 0 The mass has a value of 5 kg and the spring has...
-
Steam at 15 bar and 350c is expanded through 0.75 the reheat factor a 50% reaction turbine to a pressure of 0.14 bar. the stage efficiency is is 1.04, the expansion is carried out in 20 stages and...
-
What is the purpose of the test transmittal report, the test log? A mission-critical system fails, there are injuries, and lives and expensive equipment are lost. When the case is investigated, the...
-
Give the entry to record abandonment in each of the following cases. a. Gaylene Energy Company abandoned an unproved property that cost $150,000. The property was considered significant and had been...
-
Lomax Company typically acquires a large number of individually insignificant properties each year. In computing impairment, Lomax groups these properties by year of acquisition. During 2015, Lomax...
-
On January 1, 2010, Local Petroleum entered into a concession agreement with the government of Egypt and paid a \($3,000,000\) signing bonus. The agreement covers 20,000 acres, has a term of five...
Study smarter with the SolutionInn App