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
algol [13]
2 years ago
14

On January 1, 2018, Splash City issues $340,000 of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and

December 31 each year. Assuming the market interest rate on the issue date is 8%, the bonds will issue at $373,648.
Required:
1. Complete the first three rows of an amortization table.
Date Cash Paid Interest Expense Decrease in Carrying Value Carrying Value
1/1/18
6/30/18
12/31/18
On January 1, 2018, Splash City issues $340,000 of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. Assuming the market interest rate on the issue date is 8%, the bonds will issue at $373,648.
2. Record the bond issue on January 1, 2018, and the first two semiannual interest payments on June 30, 2018, and December 31, 2018.
Business
1 answer:
3241004551 [841]2 years ago
4 0

Answer:

Splash City

1. 1. The first three rows of an amortization table.

Date           Cash Paid   Interest Expense    Decrease in     Carrying Value

                                                                    Carrying Value

1/1/18          $0                                                                              $373,648

6/30/18      $15,300            $14,946                 $354                   373,294

12/31/18      $15,300              14,932                   368                   372,926

2. Journal Entries:

January 1, 2018L:

Debit Cash $373,648

Credit 9% Bonds Payable $340,000

Credit Bonds Premium $33,648

To record the proceeds from the bond issue, including the premium.

June 30, 2018:

Debit Interest Expense $14,946

Debit Amortization of Bonds Premium $354

Credit Cash $15,300

To record the first semiannual interest payment.

December 31, 2018:

Debit Interest Expense $14,932

Debit Amortization of Bonds Premium $368

Credit Cash $15,300

To record the second semiannual interest payment.

Explanation:

a) Data and Calculations:

January 1, 2018:

Face value of 9% bonds issued = $340,000

Proceeds from issue of bonds =     373,648

Premium on issue of bonds =         $33,648

Coupon Interest rate = 9%

Payment = Semiannually on June 30 and December 31

Market interest rate = 8%

June 30:

Interest expense = $14,946 ($373,648 * 4%)

Cash payment =       15,300 ($340,000 * 4.5%)

Amortized premium   $354

Fair value of bonds = $373,294 ($373,648 - $354)

December 31:

Interest expense = $14,932 ($373,294 * 4%)

Cash payment =       15,300 ($340,000 * 4.5%)

Amortized premium   $368

Fair value of bonds = $372,926 ($373,294 - $368)

You might be interested in
>Leland pays premiums of $5,000 for an insurance policy in the face amount of $25,000 upon the life of Caleb and subsequently
Ymorist [56]

Answer:

He can include $16,000 in his gross income.

Explanation:

As the life insurance policy was transferred for some valuable consideration so the amount of valuable consideration will be deducted from the insurance proceeds.

Also premium paid by the transferee will be deducted from proceeds.

Now as the transferee received $25,000 from insuarance company.

So Tylor can include $25,000 less $7,500 less $1,500 in his gross income.

He can include $16,000 in his gross income.

6 0
3 years ago
Formaggio Vecchio announced its regular quarterly cash dividend of $0.20 per share. Currently there are one million shares outst
aleksandr82 [10.1K]

Answer:

A.On Ex-dividend date: November 20, 2006

B.1%

C.$0.19

D. $1.82

Explanation:

1.On Ex-dividend date: November 20, 2006

will the stock price change to reflect the value of the dividend

b. Calculation for Formaggio’s dividend yield

Using this formula

Dividend yield = dividend/share price

Let plug in the formula

= .20/20 = 1%

c. Calculation of how much the stock price is likely to fall

0.20*(1 – 15%) = P*(1 – 10%)

Solve for P = $0.19

d. Calculation of How much is the stock price likely to fall Suppose that the company decides to issue a 10% stock dividend instead of a cash dividend.

$1,000,000 + (1,000,000 * 10%)

$1,000,00+$100,000

= 1,100,000 total shares

Hence,

$20,000,000 / 1,100,000 = $18.18 per share

$20 – 18.18 = $1.82 fall

5 0
3 years ago
The following information should be used to according to the provisions of GAAP (Statement of Cash Flows) and using the followin
yanalaym [24]

Answer:

                   

Explanation:

3 0
2 years ago
What does it mean to provide customer service? PLEASE HELP
stepan [7]

Answer:

Providing excellent customer service means going the extra mile in making sure a customer is happy and satisfied with a company's products or services. It also involves providing service to a customer in a timely, pleasant manner.

8 0
2 years ago
Competency: Communication Concepts
Nadusha1986 [10]

Answer:

A. His sending note was a thoughtful gesture

8 0
3 years ago
Other questions:
  • The kellys are planning for a retirement home. they estimate they will need $180,000 4 years from now to purchase this home. ass
    9·1 answer
  • nco purchased a computer for $200,000 and this machine is expected to generate annual cash flows of $48,271 over the next 5 year
    15·1 answer
  • When you tell an acquaintance your telephone number, you do not recite the digits one by one at a constant rate, as in "3, 3, 7,
    8·1 answer
  • International Toys (IT) manufactures toys in South Carolina and sells them to stores around the world. A customer in Europe is i
    15·1 answer
  • "Scuba Diving." Marcy invented a new type of mask that was not subject to fogging forscuba divers and obtained a patent on it. S
    9·1 answer
  • Example 31: S borrows 5,00,000 to buy a house. If he pays equal instalments for 20 years
    11·1 answer
  • Danahy Corporation manufactures a single product. The following data pertain to the company's operations over the last two years
    8·1 answer
  • The following data are taken from the financial statements of Bar Harbor Company:
    5·1 answer
  • Washington Farms makes apple dumplings and apple pies using the same
    15·1 answer
  • The Federal Reserve's Open Market Committee has decided that the federal funds rate should be 0.5 percent rather than the curren
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!