The fiscal year ends December 31 for Lake Hamilton Development. To provide funding for its Moonlight Bay project, LHD issued 5% bonds with a face amount of $500,000 on November 1, 2021. The bonds sold for $442,215, a price to yield the market rate of 6%. The bonds mature October 31, 2041 (20 years). Interest is paid semiannually on April 30 and October 31.Required:1. What amount of interest expense related to the bonds will LHD report in its income statement for the year ending December 31, 2021?2. What amount(s) related to the bonds will LHD report in its balance sheet at December 31, 2021?3. What amount of interest expense related to the bonds will LHD report in its income statement for the year ending December 31, 2022?4. What amount(s) related to the bonds will LHD report in its balance sheet at December 31, 2022?

The fiscal year ends December 31 for Lake Hamilton Development. To provide funding for its Moonlight Bay project, LHD issued 5% bonds with a face amount of $500,000 on November 1, 2021. The bonds sold for $442,215, a price to yield the market rate of 6%. The bonds mature October 31, 2041 (20 years). Interest is paid semiannually on April 30 and October 31.Required:1. What amount of interest expense related to the bonds will LHD report in its income statement for the year ending December 31, 2021?2. What amount(s) related to the bonds will LHD report in its balance sheet at December 31, 2021?3. What amount of interest expense related to the bonds will LHD report in its income statement for the year ending December 31, 2022?4. What amount(s) related to the bonds will LHD report in its balance sheet at December 31, 2022?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 1RE

See similar textbooks

Similar questions

The fiscal year ends December 31 for Lake Hamilton Development. To provide funding for its MoonlightBay project, LHD issued 5% bonds with a face amount of $500,000 on November 1, 2018. The bonds sold for$442,215, a price to yield the market rate of 6%. The bonds mature October 31, 2038 (20 years). Interest is paidsemiannually on April 30 and October 31.Required:1. What amount of interest expense related to the bonds will LHD report in its income statement for the yearending December 31, 2018?2. What amount(s) related to the bonds will LHD report in its balance sheet at December 31, 2018?3. What amount of interest expense related to the bonds will LHD report in its income statement for the yearending December 31, 2019?4. What amount(s) related to the bonds will LHD report in its balance sheet at December 31, 2019?
The fiscal year ends December 31 for Lake Hamilton Development. To provide funding for its Moonlight Bay project, LHD issued 5% bonds with a face amount of $500,000 on November 1, 2016. The bonds sold for $442,215, a price to yield the market rate of 6%. The bonds mature October 31, 2036 (20 years). Interest is paid semiannually on April 30 and October 31. Required: 1. What amount of interest expense related to the bonds will LHD report in its income statement for the year ending December 31, 2016? 2. What amount(s) related to the bonds will LHD report in its balance sheet at December 31, 2016? 3. What amount of interest expense related to the bonds will LHD report in its income statement for the year ending December 31, 2017? 4. What amount(s) related to the bonds will LHD report in its balance sheet at December 31, 2017?
The fiscal year ends December 31 for Lake Hamilton Development. To provide funding for its Moonlight Bay project, LHD issued 5% bonds with a face amount of $500,000 on November 1, 2024. The bonds sold for $442,215, a price to yield the market rate of 6%. The bonds mature October 31, 2043 (20 years). Interest is paid semiannually on April 30 and October 31 and is determined using the effective interest method. Required: 1. What amount of interest expense related to the bonds will LHD report in its income statement for the year ending December 31, 2024? 2. What amount(s) related to the bonds will LHD report in its balance sheet at December 31, 2024? 3. What amount of interest expense related to the bonds will LHD report in its income statement for the year ending December 31, 2025? 4. What amount(s) related to the bonds will LHD report in its balance sheet at December 31, 2025? Note: For all requirements, do not round your intermediate calculations. Enter your answers in whole dollars. X…
On January 1, 2021, Splash City issues $500,000 of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. The market interest rate on the issue date is 10% and the bonds issued at $457,102. Required: 1. Using an amortization schedule, show that the bonds have a carrying value of $458,633 on December 31, 2022. 2. If the market interest rate drops to 7% on December 31, 2022, it will cost $601,452 to retire the bonds. Record the retirement of the bonds on December 31, 2022.
[The following information applies to the questions displayed below.] On January 1, 2021, Splash City issues $450,000 of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year.Assuming the market interest rate on the issue date is 6%, the bonds will issue at $483,476. Required: 1. Complete the first three rows of an amortization table for 1/1/21, 6/30/21, 12/31/21
On January 1, 2018, Splash City issues $470,000 of 7% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. The market interest rate on the issue date is 8% and the bonds issued at $423,487. Required: 1. Using an amortization schedule, show that the bonds have a carrying value of $425,566 on December 31, 2019. (Round Interest expense to nearest whole dollar.) Date Cash Paid 01/01/18 6/30/18 12/31/18 6/30/19 12/31/19 Interest Expense Increase in Carrying Value Carrying Value Required information
On January 1, 2024, Reyes Recreational Products issued $150,000, 9%, four-year bonds. Interest is paid semiannually on June 30 and December 31. The bonds were issued at $136,028 to yield an annual return of 12%. Required: 1. Prepare an amortization schedule that determines interest at the effective interest rate. 2. Prepare an amortization schedule by the straight-line method. 3. Prepare the journal entries to record interest expense on June 30, 2026, by each of the two approaches. 5. Assuming the market rate is still 12%, what price would a second investor pay the first investor on June 30, 2026, for $18,000 of the bonds?
On January 1, 2024, Reyes Recreational Products issued $125,000, 10%, four-year bonds. Interest is paid semiannually on June 30 and December 31. The bonds were issued at $117,237 to yield an annual return of 12%. Required: 1. Prepare an amortization schedule that determines interest at the effective interest rate. 2. Prepare an amortization schedule by the straight-line method. 3. Prepare the journal entries to record interest expense on June 30, 2026, by each of the two approaches. 5. Assuming the market rate is still 12%, what price would a second investor pay the first investor on June 30, 2026, for $15,000 of the bonds? Prepare an amortization schedule that determines interest at the effective interest rate. Note: Enter your answers in whole dollars. Payment Number 1 2 3 4 5 6 7 Cash Payment Show Transcribed Text Payment Cash Number 1 2 3 4 5 6 7 Effective Interest Prepare an amortization schedule by the straight-line method. Note: Do not round intermediate calculations. Enter your…
On January 1, 2024, Reyes Recreational Products issued $150,000, 9%, four-year bonds. Interest is paid semiannually on June 30 and December 31. The bonds were issued at $145,153 to yield an annual return of 10%. Required: 1. Prepare an amortization schedule that determines interest at the effective interest rate 2. Prepare an amortization schedule by the straight-line method. 3. Prepare the journal entries to record interest expense on June 30, 2026, by each of the two approaches. 5. Assuming the market rate is still 10%, what price would a second investor pay the first investor on June 30, 2026, for $15,000 of the bonds? Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 5 Prepare an amortization schedule that determines interest at the effective interest rate. Note: Enter your answers in whole dollars.…
On January 1, 2021, Bradley Recreational Products issued $100,000, 9%, four-year bonds. Interest is paid semiannually on June 30 and December 31. The bonds were issued at $96,768 to yield an annual return of 10%.Required:1. Prepare an amortization schedule that determines interest at the effective interest rate.2. Prepare an amortization schedule by the straight-line method.3. Prepare the journal entries to record interest expense on June 30, 2023, by each of the two approaches.4. Explain why the pattern of interest differs between the two methods.5. Assuming the market rate is still 10%, what price would a second investor pay the first investor on June 30, 2023, for $10,000 of the bonds?
On January 1, 2021, Splash City issues $390,000 of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. The market interest rate on the issue date is 8% and the bonds issued at $363,499. Exercise 9-16A Part 1 1. Using an amortization schedule, show that the bonds have a carrying value of $367,278 on December 31, 2022. (Round Interest expense to nearest whole dollar.)
On January 1, 2020, Joe Construction issued $350,000, 3-year bonds for $320,000. The stated rateof interest was 7% and interest is paid annually on December 31.1. Calculate the amount of discount that will be amortized each period. Discount/period:2. Calculate the amount of interest expense for each period.Interest/period:3. Complete the amortization table below for Joe Constructions bonds. Joe ConstructionAmortization for BondsPeriod Cash Payment (credit)Interest Expense(debit)Discount onBondsPayable(Credit)Discount onBondsPayableBalance Book ValueAt issue $ - $ - $ - $ 320,00012/31/202012/31/202112/31/2022