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
MissTica
3 years ago
10

On January 1, 2018, Surreal Manufacturing issued 600 bonds, each with a face value of $1,000, a stated interest rate of 3 percen

t paid annually on December 31, and a maturity date of December 31, 2020. On the issue date, the market interest rate was 4 percent, so the total proceeds from the bond issue were $583,352. Surreal uses the effective-interest bond amortization method and adjusts for any rounding errors when recording interest in the final year.
Required:
1. Prepare a bond amortization schedule 2-5.
2. Prepare the journal entries to record the bond issue, the interest payments on December 31, 2018 and 2019, the interest and face value payment on December 31, 2020 and the bond retirement.
Business
1 answer:
Hoochie [10]3 years ago
8 0

Answer:

Period    Bonds        Interest    Cash        Increase in        Bonds payable

             Payable     Expenses   Paid       Bonds payable     at the end

2018     583352      23334.08   18000         5334.08          588686.1

2019     588686.1    23547.44   18000         5547.44          594233.5    

2020    594233.5   23766.48   18000         5766.48          600000

Journal entries

<u>Jan 01 2018</u>

Cash account Dr $583352

Discount on Bonds Payable Dr $16648

Bonds payable Cr $600000

<u>Dec 31 2018</u>

Interest expense Dr $23334.08

Cash account Cr $18000

Discount on bonds Payable Cr $5334.08

<u>Dec 31 2019</u>

Interest expense Dr $23547.44

Cash account Cr $18000

Discount on bonds Payable Cr $5547.44

<u>Dec 31 2020</u>

Interest expense Dr 23766.48

Cash account Cr $18000

Discount on bonds Payable Cr $5766.48

<u>Dec 31 2020</u>

Bonds Payable Dr $600000

Cash account Cr $600000

<u>01.01.2020</u> (Redemption at 101)

Bonds Payable Dr $600000

Loss on redemption of bonds Dr $11766.48

Cash account (600000*101%) Cr $606000

Discount on bonds payable Cr $5766.48

You might be interested in
Krisp Systems decides to move production to a developing country where they are free to pump pollutants into the atmosphere with
Delvig [45]

Answer:

Environmental hazards and underdevelopment

Explanation:

Aware of existing policies to curb the careless release of pollutant to the atmosphere, relocating to developing country's amounts to refusal to pay taxes, cutting corners in order to make more profits and reduction in additional cost to operations. But most importantly, the company is not a promoter of the eradication of environmental hazards.

4 0
3 years ago
g Question 3 At Springfield, the engraving department is a bottleneck, and the company is considering hiring an extra worker, wh
erastovalidia [21]

Answer:

The net income will increase by $15,340 due to hiring of extra worker.

Explanation:

Salary of extra worker = $55,577

Extra production = 7,700 units

Selling price per unit = $13

Direct material per unit = $2.56

Direct labor per unit = $1.00

Variable overhead per unit = $0.23

Fixed overhead = $3.90. Due to extra production, fixed overhead will not increase.

Particulars                                       Amount

Sales revenue (7,700 * 13)             $100,100

Expenses:

Direct material (7,700 * $2.56)     -$19,712

Direct labor (7,700 * $1.00)           -$7,700

Variable overhead (7,700* 0.23)  -$1,771

Salary of extra worker                   <u>-$55,577 </u>

Net income                                     <u>$15,340</u>

Thus, due to hiring of extra worker net income income will increase by $15,340

6 0
3 years ago
How much taxes will be taken out of my paycheck.
natima [27]
Matters where you live. it is different in different places.
5 0
2 years ago
What is network architecture?
Varvara68 [4.7K]

Answer:

 Network architecture refers to the layout of the network, consisting of the hardware, software, connectivity, communication protocols, and mode of transmission (i,e. wired or wireless). This FAQ will introduce you to the concept.

  I hope this answer helps you>>>>

4 0
3 years ago
The Securities and Exchange Commission was a New Deal program designed to regulate __________. importing quotas farming practice
Softa [21]

The Securities and Exchange Commission was a New Deal program designed to regulate stock market.

<h3><u>Explanation:</u></h3>

The place where the trading of the public listed companies takes place refers to the stock market. This is a method that is used by the companies to raise the capital. Those companies that wishes to raise capital would be offering the shares to the public in general as an initial public offering. This is the place of meeting of the stock sellers and buyers.

The buyers of the stock market will try to get stocks at a reduced rate so that they can sell that for profits at later stages. The stocks can be considered as a smaller portion of ownership that a buyer can enjoy in a public company. A new deal program that is being designed for the regulation of the stock market is the Securities and Exchange Commission.

8 0
3 years ago
Read 2 more answers
Other questions:
  • The_____?outlines regulations to control air emissions from various sources, whether stationary or in motion.
    8·1 answer
  • Big John's Manufacturing Company currently produces its lead product on an "Old Machine" that has a variable cost of $0.32 per u
    11·1 answer
  • Please someone help
    11·1 answer
  • What are the five C's of credit?
    11·1 answer
  • Mustaine, inc., has a current stock price of $54. for the past year, the company had net income of $7,900,000, total equity of $
    11·1 answer
  • The International Property Right Index scores countries based on the legal and political environment and how well property right
    11·1 answer
  • The Tragedy of the Commons Select one: a. occurs when social incentives are in line with private incentives. b. is only applicab
    8·1 answer
  • Ortiz Co. produces 5,000 units of part A12E. The following costs were incurred for that level of production: Direct materials $
    6·1 answer
  • When Alice started working, she has decided to deposit $250 a pay check into a savings account that earns an interest of 1% per
    5·1 answer
  • four seasons why it is important for a novice entrepreneur to build positive relationships with customers
    11·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!