On July 1, 2018, bondholders converted bonds of Vebbz Corporation with a face value of $90,000 into 1,800 of its no par value common shares. On that date, these shares were being traded at $51 and there was a balance of $3,600 of discount on the bonds remaining unamortized. All interest has been recorded and paid up to that date. When the bonds had been issued, the equity portion of the issue was recorded at $850. The balance of this unamortized discount amounted to 40% of the discount recorded on the date the bonds had been issued. Interest is paid on June 30 and December 31 and the bond discount is being amortized at $675 per interest period. Assume for the 3 following questions that Vebbz is using ASPE.
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- Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market rate of 4%. The bonds paid interest semi-annually on June 30 and Dec. 31. How much money did the company receive when the bonds were issued? The bonds would be quoted at what rate?On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?Sandhill Co. sold $5,600,000, 7%, 15-year bonds on January 1, 2025. The bonds were dated January 1, 2025, and pay interest on December 31. The bonds were sold at 97. Prepare the journal entry to record the issuance of the bonds on January 1, 2025. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Jan. 1, 2025 eTextbook and Media eTextbook 1 e Textbook 2 Video List of Accounts eTextbook and Media Debit At December 31, 2025, $11,200 of the bond discount had been amortized. Show the long-term liability balance sheet presentation of the bond liability at December 31, 2025. SANDHILL CO. Balance Sheet (Partial) $ Credit Assistance Used Accictancocod
- The situations presented here are independent of each other.For each situation, prepare the appropriate journal entry for the redemption of the bonds. Kingbird, Inc. redeemed $168,000 face value, 14.5% bonds on June 30, 2022, at 99. The carrying value of the bonds at the redemption date was $181,440. The bonds pay annual interest, and the interest payment due on June 30, 2022, has been made and recorded. Date Account Titles and Explanation Debit Credit Jun. 30 enter an account title for the journal entry on June 30enter an account title for the journal entry on June 305. On December 31, 2018, the balance sheet of Alphabet Corporation reported bonds outstanding with a face value of $6,000,000 and a related unamortized premium of $180,000. Interest is payable semiannually on January 1 and July 1. Prepare an entry in journal form without explanation on January 1, 2018, to record the conversion of bonds with a face value of $2,400,000 into common stock. Each $1,000 bond is convertible into 30 shares of $20 par value common stock. (6]The situations presented here are independent of each other.For each situation, prepare the appropriate journal entry for the redemption of the bonds. Pina Colada Corp. redeemed $136,000 face value, 9% bonds on April 30, 2022, at 101. The carrying value of the bonds at the redemption date was $122,808. The bonds pay annual interest, and the interest payment due on April 30, 2022, has been made and recorded. Date Account Titles and Explanation Debit Credit Apr. 30 enter an account title for the journal entry on April 30enter an account title for the journal entry on April 30
- Cullumber Company sold $2,000,000, 4%, 10-year bonds on January 1, 2022. The bonds were dated January 1 and pay interest annually on January 1. Cullumber Company uses the straight-line method to amortize bond premium or discount. The bonds were sold at 101. (a) Correct answer iconYour answer is correct. Prepare the journal entry to record the issuance of the bonds on January 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 1, 2022 enter an account title for the journal entry on January 1, 2022 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1, 2022 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1, 2022 enter a debit amount…Kingbird, Inc. issued $430,000 of 5-year, 7% bonds at 97 on January 1, 2020. The bonds pay interest annually. a.) Prepare the journal entry to record the issuance of the bonds. Account Titles and Explanation Debit Credit b.) Compute the total cost of borrowing for these bonds. Total cost of borrowing $ ? c.) Prepare the journal entry to record the issuance of the bonds, assuming the bonds were issued at 101. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit d.) Compute the total cost of borrowing for these bonds, assuming the bonds were issued at 101. Total cost of borrowing $ ?Nocioni Company issued $1,000,000 of bonds on January 1, 2010. Instructions Prepare the journal entry to record the issuance of the bonds if they are issued at (1) 100,(2), 98, and (3) 103. Prepare the journal entry to record the retirement of the bonds at maturity, assuming the bonds were issued at 100. Prepare the journal entry to record the retirement of the bonds before maturity at 98. Assume the balance in Premium on Bonds Payable is $9,000. Prepare the journal entry to record the conversion of the bonds into 30,000 shares of $10 par value common stock. Assume the bonds were issued at par.
- Blossom Company issued $510,000 of 5-year, 9% bonds at 96 on January 1, 2022. The bonds pay interest annually. (a1) Your answer is correct. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Cash Discount on Bonds Payable Bonds Payable Your answer is incorrect. Compute the total cost of borrowing for these bonds. Total cost of borrowing eTextbook and Media List of Accounts - Your answer is partially correct. Account Titles and Explanation Interest Expense (DZ). Premium on Bonds Payable $ Interest Payable Prepare the journal entry to record the issuance of the bonds, assuming the bonds were issued at 104. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Total cost of borrowing Debit eTextbook and Media $ 489600 Debit 20400 Compute the total cost of borrowing for these bonds, assuming the bonds were…Flint Corporation sold $3,050,000, 6%, 5-year bonds on January 1, 2022. The bonds were dated January 1, 2022, and pay interest on January 1. Flint Corporation uses the straight-line method to amortize bond premium or discount. (a) Prepare all the necessary journal entries to record the issuance of the bonds and bond interest expense for 2022, assuming that the bonds sold at 103. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 Dec. 31Crane Electric sold $6,240,000, 10%, 10-year bonds on January 1, 2022. The bonds were dated January 1, 2022, and paid interest annually on January 1. The bonds were sold at 98. (a) Prepare the journal entry to record the issuance of the bonds on January 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)