Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On March 1, 2020, Quinto Mining Inc. issued a $690,000, 8%, three-year bond. Interest is payable semiannually beginning September 1, 2020. Required: Part 1 a.

On March 1, 2020, Quinto Mining Inc. issued a $690,000, 8%, three-year bond. Interest is payable semiannually beginning September 1, 2020.

Required:
Part 1

a. Calculate the bond issue price assuming a market interest rate of 7% on the date of issue.

b. Using the effective interest method, prepare an amortization schedule.


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, Quinto’s year-end, and the payment of interest on September 1, 2020.

Part 2
a. Calculate the bond issue price assuming a market interest rate of 9.0% on the date of issue. 

b. Using the effective interest method, prepare an amortization schedule. 

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, Quinto’s 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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Part 1 Bond issue pricePresent value of bond interest paymentPresent value repayment of bond at matu... 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

Step: 3

blur-text-image

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

Fundamental Accounting Principles Volume II

Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann

16th Canadian edition

1259261433, 978-1260305838

More Books

Students also viewed these Physics questions

Question

What behaviour demonstrates where they are on this scale?

Answered: 1 week ago