bonds payable issue at premiun interest payment redemption 496277
Aug 29, 2021 | Uncategorized
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Following is an amortization table for an issue of three-year bonds on January 1, 2011: |
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Effective |
Contractual |
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Carrying |
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Carrying Value at |
Interest |
Interest |
Amortization |
Value End |
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Year |
Beginning of Year |
Incurred |
to be Paid |
of Principal |
Of Year |
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2011 |
$105,154 |
$8,412 |
$10,000 |
$1,588 |
$103,566 |
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2012 |
$103,566 |
$8,285 |
$10,000 |
$1,715 |
$101,851 |
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2013 |
$101,851 |
$8,148 |
$10,000 |
$1,852 |
$100,000 |
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Total |
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$24,845 |
$30,000 |
$5,155 |
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Required: |
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Place you answer in the shaded boxes below with any computations to the right |
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A. How much were the bonds sold for? |
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B. What is the stated (contractual) rate of interest? |
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C. What is the effective rate of interest? |
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D. Record the entries necessary over the life of the bonds for the issuance, retirement and yearly interest accrual. |
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You do not need to record the payment of interest. |
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Date |
Account Title |
Debit |
Credit |
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1/1/11 |
Cash |
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The accounts for the first entry have been entered |
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Premium on Bonds Payable |
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enter the amounts and record the remaining entries. |
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Bonds Payable |
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Start each entry opposite the date |
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12/31/11 |
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12/31/12 |
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12/31/13 |
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12/31/13 |
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