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Tarawa Limited issued $900,000 of 10-year, 5% bonds on January 1, 2018, when the market interest rate was 6%. Tarawa received $833,055 when the bonds
Tarawa Limited issued $900,000 of 10-year, 5% bonds on January 1, 2018, when the market interest rate was 6%. Tarawa received $833,055 when the bonds were issued. Interest is payable semi-annually on July 1 and January 1. Tarawa has a December 31 year end. Your answer is partially correct. Record the issue of the bonds on January 1. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 Cash 833055 Bonds Payable -66945 e Textbook and Media List of Accounts Your answer is partially correct. Record the payment of interest on July 1. (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.) Date Account Titles and Explanation Debit Credit July 1 Interest Expense -49983 Bonds Payable -4983 Cash -45000 e Textbook and Media List of Accounts Your answer is partially correct. Record the accrual of interest on December 31. (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.) Date Account Titles and Explanation Debit Credit Dec. 31 Interest Expense -50282 Bonds Payable -5282 Interest Payable -45000 Prove the amount of cash received when the bonds were sold by determining the bonds' present value (issue price) on January 1, 2018. Prove the carrying amount of the bonds, one year later, by determining the present value of the bonds at that time. (Round answers to O decimal places, e.g. 5,275.) Bonds' present value (issue price) on January 1, 2018 $ 833055 Present value of the bonds $ -502551 e Textbook and Media
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