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andrew11 [14]
3 years ago
13

On June 30, 20X5, Huff Corp. issued at 99, 1000 of its 8%, $1,000 bonds. The bonds were issued through an underwriter to whom Hu

ff paid bond issue costs of $35,000. On June 30, 20X5, Huff should report the bond liability at
Business
2 answers:
Stels [109]3 years ago
4 0

Answer:

$1,000,000

Explanation:

The Bond Issued less than its face value is issued on the discount. This discount is recorded and amortized until the maturity of bond.

Discount on the Bond = Face value - Issuance value = ($1,000 x 1,000) - ($1,000 x 1,000) x 99% = $1,000,000 - $990,000 = $10,000

Journal Entry

Dr.  Cash                        $990,000

Dr.  Discount on Bond  $10,000

Cr. Bond Payable          $1,000,000

Bond Liability on June 30, 20x5 is $1,000,000.

dem82 [27]3 years ago
3 0

Answer:

$955,000

Explanation:

We have to first calculate the net issuance value = 1,000 bonds x $1,000 x .99 = $990,000. This way we record the discount price.

Then we must subtract the costs related to the issuance of the bonds = $990,000 - $35,000 = $955,000.

The $35,000 must be treated as expenses, they are not part of the bonds' value.

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(Guessing, i could be wrong but i like helping so here your go i guess)

Explanation:

DOs and DON’Ts

DO Organize your response. Look at the question; it has a natural

organizational pattern – a blueprint.

DO Ask your friends and family to help you remember all the details

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DO Show what you are like as a person, but be as selective as

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DO Find a controlling idea for your essay. Smooth prose leaves a

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DO Find a controlling idea for your essay. Smooth prose leaves a

good impression. A series of short, curt sentences does not.

DO Be positive and upbeat in tone.

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DO Take your drafts to the College Writing Center or ask a

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DO Revise the essay and proofread.

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DON’T Use clichés or generalities. This wastes valuable space and

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DON’T Brag. Trust that your good points will shine through

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