1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Oksi-84 [34.3K]
2 years ago
11

The Gorman Group issued $920,000 of 9% bonds on June 30, 2021, for $1,011,047. The bonds were dated on June 30 and mature on Jun

e 30, 2041 (20 years). The market yield for bonds of similar risk and maturity is 8%. Interest is paid semiannually on December 31 and June 30. Required: 1. to 3. Prepare the journal entries to record their issuance by The Gorman Group on June 30, 2021, interest on December 31, 2021 and interest on June 30, 2022 (at the effective rate).

Business
1 answer:
Mandarinka [93]2 years ago
6 0

Answer and Explanation:

The Journal entry is shown below:-

1. Cash Dr, $1,011,047

    To bonds payable $920,000

     To Premium issue of bonds $91,047

(Being Issue of bonds at premium is recorded)

2. The completion of the table is shown below:-

Dec 31, 2018        Amount          Interest rate       Total

Interest expense  $1,011,047        4%                 $40,441.8

                                                (8% × 6 ÷ 12)

Cash                       $920,000       4.5%               $41,400

                                                (9% × 6 ÷ 12)

Amortization of premium                                       $958.2

Interest expense Dr, $40,441.8

Premium issue of bonds Dr, $9,582

     To Cash $41,400

(Being interest expense and amortization of premium is recorded)

3. Dec 31, 2018        Amount          Interest rate       Total

Interest expense   $1,010,088            4%             $40,403.5

                ( $1,011,047 - $958.2)      (8% × 6 ÷ 12)

Cash                       $920,000       4.5%               $41,400

                                               (9% × 6 ÷ 12)

Amortization of premium                                       $996.5

Interest expense Dr, $40,403.5

Premium issue of bonds Dr, $995.5

     To Cash $41,400

(Being interest expense and amortization of premium is recorded)

You might be interested in
Sold merchandise on credit to Rondo Distributors, for $1,200, terms n/30. The cost of the merchandise was $720. 8 Purchased merc
Iteru [2.4K]

Answer:

See the explanation.

Explanation:

Account receivable Rondo Distributors debit        $1,200

Sales revenue                                          credit                 $1,200

Note: To record the merchandise sales on account. As the company used the periodic inventory system, we do not need to give the cost of goods sold journals.

Purchase debit                     10,000

Accounts payable credit               10,000

Note: To record the purchase on account.

Delivery expense  debit        $525

Cash                       credit              $525

Note: To record the payment of the delivery expense.

8 0
3 years ago
You can receive 400,000 five years from today or 1,000,000 thirty years from today. what interest rate makes them equivalent?
deff fn [24]

Answer:

3.73%

Explanation:

The computation of the rate of interest that makes the equivalent is shown below:

As we know that

Present value=Cash flow × Present value discounting factor ( interest rate% , time period)

Let us assume the interest rate be x

where,

Present value of $400,000 is

= $400,000 ÷ 1.0x ^5

And,

Present value of $1,000,000 be

= $1,000,000 ÷ 1.0x^30

Now eqaute these two equations

$400,000 ÷ 1.0x^5 = $1,000,000 ÷ 1.0x^30

(1.0x^30) ÷ (1.0x^5) = $1,000,000 ÷ $400,000

1.0x^(30 - 5)=2.5

1.0x^25=2.5

1.0x = (2.5)^(1 ÷ 25)

x =1.03733158 - 1

= 3.73%

3 0
3 years ago
Unlike sole proprietorship and partnerships, the corporation has a life independent of its owners and officers. true or false
musickatia [10]

Unlike sole proprietorship and partnerships, the corporation has a life independent of its owners and officers. This statement is true.

<h3>What is Partnership?</h3>
  • In a partnership, parties who are referred to as business partners agree to work together to further their shared objectives. Individuals, companies, interest-based organizations, schools, governments, or combinations of these may be the partners in a partnership.
  • Organizations may work together to expand their reach and increase the likelihood that each will succeed in reaching their goals.
  • A partnership may solely be controlled by a contract, or it may issue and hold stock. Business: Two or more businesses collaborate in a joint venture, a buyer-supplier arrangement, a strategic alliance, or a consortium to: I work on a project (such as an industrial or research project) that would be too difficult or risky for a single entity; and (ii) join forces to have a stronger position on the market.

To learn more about partnership with the given link

brainly.com/question/19988417

#SPJ4

5 0
1 year ago
As she digs deeper into the data, Ophelia realizes that while discounters do have a high profit level, discounters are quite low
zlopas [31]

Answer: Return on sales is calculated based on sales volume and not profit

Explanation:

This can be explained by understanding the scenario; the price that discounters pay is lower than any other channel. Discounters have high variable cost, they only pay $52 for the Russel with 41percent return on sales. They also larger fixed costs than the other channels and the return on sales is calculated based on sales volume and not profit.

7 0
2 years ago
Harold borrows $20,000 from Alex and signs a note promising to pay Alex this amount plus interest in one year. Alex negotiates t
Tomtit [17]

Answer:

B)

Explanation:

Reese can recover from Alex.

4 0
3 years ago
Other questions:
  • __________ reverses the usual process of first designing a new​ product, determining its​ cost, and then​ asking, "can we sell i
    5·1 answer
  • Assume €1 = $1.1364 and $1 = S$1.2408. A new coat costs S$213 in Singapore. How much will the identical coat cost in euros if ab
    11·1 answer
  • Both buyers and sellers of a good are responsive to changes in the price of the product. An increase in the sales tax on the pro
    10·1 answer
  • All else equal, what is likely to happen to the unemployment rate during a recession?
    15·1 answer
  • 4. AirCar LLC, a producer of consumer electronics, had provided its employees an annual bonus. After a change in management, the
    5·1 answer
  • Paunch Burger has a beta of 1.2 and just paid a dividend of $2.30 that is expected to grow at 3.2%. If the risk-free rate is 3%
    8·1 answer
  • What is a commodity?
    5·2 answers
  • Bigbucks Brokerage provided the taxpayer $2,400 in bicycle commuting reimbursement in 2020. How much of that reimbursement, if a
    5·1 answer
  • Lincoln, Inc., which uses a volume-based cost system, produces cat condos that sell for $140 each. Direct materials cost $22 per
    12·1 answer
  • how to know if your friend is lying to you? he has a bruise and I made a random guess and he froze up
    15·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!