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]
3 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]3 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
If Ben and the HR managers do nothing about the promotion opportunities in the organization, employee satisfaction is likely to
Andru [333]

Answer:

Employee satisfaction is likely to be lower

Explanation:

Promotion opportunities are an important form of reward inside an organization. If there are no promotion opportunities in place, this means that employee satisfaction will likely be lower, because there one incentive less to work hard: the incentive of being promoted.

3 0
3 years ago
On January 5, 2020, Sheffield Corporation received a charter granting the right to issue 5,100 shares of $100 par value, 7% cumu
andrew11 [14]

Answer:

 Sheffield Corporation

Journal Entries

Date             Description                              DR                           CR

Jan 11         Cash                                       292,500

                 Common stock                                                     195,000

                 Paid in Capital for common stock                         97,500

               

              <em>Being the amount received on issue of </em>

<em>              </em>

Feb 11     Equipment                                   53,300

              Factory Building                          152,000

              Land                                             295,000

             Prefereed stock                                                     410,000

             Paid -in -capital for Preferred stock                        90,300

July 29   Treasury stock                              25,600

              Cash                                                                            25,600

            Being the payment of own share purchased

Aug 10    Cash                                                   22,400

                Retained Earnings                               3,200

               Treasury stock                                                      25,600

 

Dec 31       Retained  earnings                              10,025

                 Dividend(0.35*19500)                                            6,825  

                 Treasury stock                                                         3,200  

Dec 31       Net Income ( Income Summary)      158,400

                  Retained Earnings                                               158,400

Balance sheet as at Dec 31

Equity

Common stock at $10 par value                                      $195,000

7% Preferred Stock                                                            410,000

Paid in capital for common stock                                        97,500

Paid in capital for Preferred stock                                        90,300

Retained Earnings ( 158,400-6825-3200)                         <u> 148,375</u>

                                                                                             <u>  941,175</u>

Explanation:

4 0
3 years ago
U. s. treasury securities considered to be risk-free because they have minimal, if any, ____ risk.
zubka84 [21]

U. s. treasury securities are considered risk-free because they have minimal if any, default risk.

Given that the U.S. government stands behind them with its full faith and credit, Treasury securities are among the safest investments. According to the maturity period, Treasury securities are separated into three major groups:

  • Treasury Notes
  • Treasury Bonds
  • Treasury Bills

You can buy any of these Treasury securities directly from the US government, through a bank, or through a broker. Despite being low-risk, treasuries do have some risks, such as being affected by inflation and interest rate changes. Treasuries have low returns because they are a secure investment. Federal taxes must be paid on interest received on Treasury securities.

To know more about Treasury securities refer to:  brainly.com/question/15004124

#SPJ4

8 0
1 year ago
Drag each tile to the correct box.
vitfil [10]
I need points sorrybsjsjhsenejwvwnwjemehshsuisksns
5 0
3 years ago
The current exchange rate between U.S. Dollar and Euro is $1.355/.738. It means that:______a. one Euro can buy 0.738 Dollars.b.
Verdich [7]

Answer:

b. one Dollar can buy 0.738 Euros

Explanation:

Given that

The Current Exchange rate is

= $1.335 ÷ 0.738 Euro

The 0.738 represents the indirect exchange rate now transform it into direct exchange rate

Direct Exchange rate is

= $1 ÷ 0.738 Euro

= $1.3550

Now bid price for purchase one euro is $1.335 and ask price to purchase one euro is $1.355

But the person could purchased at ask price only

Therefore the option b is correct

4 0
3 years ago
Other questions:
  • If purchasing power parity holds, a bushel of rice costs $10 in the US, and the nominal exchange rate is 2 Thai bhat per dollar,
    12·1 answer
  • Jennifer's family always celebrates Christmas with decorated tree and stockings hung on the fireplace. These holiday decorations
    8·1 answer
  • Which of the following pairs of accounts could not appear in the same adjusting entry? a. Interest Income and Interest Expense b
    5·1 answer
  • According to empirical studies, greater consumption is likely to lead to unhappiness. This condition is called _____.
    7·1 answer
  • Which of the following are ways in which to calculate the benefit of selecting one alternative over another? An analysis that lo
    14·1 answer
  • In the accompanying figure, you can enter CSU10 in the ____ row of the Customer Number field to find all customers whose custome
    10·1 answer
  • A(n) ____________________________ exists to promote the sales of a particular manufacturer’s products.
    14·2 answers
  • The Dorilane Company specializes in producing a set of wood patio furniture consisting of a table and four chairs. The set enjoy
    11·1 answer
  • Far Side Corporation is expected to pay the
    14·1 answer
  • So there this girl and she is ...um ...a lot we were friends for along time and then she started starting fights with me and bei
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!