Lopez Plastics Co. (LPC) issued callable bonds on January 1, 2021. LPC's accountant has projected the following amortizationschedule from issuance until maturity:CashEffectiveDecrease inOutstandingDateinterestinterestbalancebalance1/1/20212$207,0206/30/20212$7,0002$6,211$789206,23012/31/20217,0006,187813205,4176/30/20227,0006,163837204,58012/31/20227,0006,137863203,7176/30/20237,0006,112888202,82912/31/20237,0006,085915201,9136/30/20247,0006,057943200,97112/31/20247,0006,029971200,000What is the annual stated interest rate on the bonds?A) 3.5%B) 6%C) 7%D) None of the answer choices is correct.

Lopez Plastics Co. (LPC) issued callable bonds on January 1, 2021. LPC's accountant has projected the following a schedule from issuance until maturity: Cash Effective Decrease in Outstanding Date interest interest balance balance 1/1/2021 24 207,020 6/30/2021 24 7,000 2$ 6,211 2$ 789 206,230 12/31/2021 7,000 6,187 813 205,417 6/30/2022 7,000 6,163 837 204,580 12/31/2022 7,000 6,137 863 203,717 6/30/2023 7,000 6,112 888 202,829 12/31/2023 7,000 6,085 915 201,913 6/30/2024 7,000 6,057 943 200,971 12/31/2024 7,000 6,029 971 200,000 What is the annual stated interest rate on the bonds?

Lopez Plastics Co. (LPC) issued callable bonds on January 1, 2021. LPC's accountant has projected the following a schedule from issuance until maturity: Cash Effective Decrease in Outstanding Date interest interest balance balance 1/1/2021 24 207,020 6/30/2021 24 7,000 2$ 6,211 2$ 789 206,230 12/31/2021 7,000 6,187 813 205,417 6/30/2022 7,000 6,163 837 204,580 12/31/2022 7,000 6,137 863 203,717 6/30/2023 7,000 6,112 888 202,829 12/31/2023 7,000 6,085 915 201,913 6/30/2024 7,000 6,057 943 200,971 12/31/2024 7,000 6,029 971 200,000 What is the annual stated interest rate on the bonds?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Lopez Plastics Co. (LPC) issued callable bonds on January 1, 2021. LPC's accountant has projected the following amortization schedule from issuance until maturity: Cash Effective Decrease in Outstanding Date interest interest balance balance 1/1/2021 2$ 207,020 6/30/2021 24 7,000 24 6,211 2$ 789 206,230 12/31/2021 7,000 6,187 813 205,417 6/30/2022 7,000 6,163 837 204,580 12/31/2022 7,000 6,137 863 203,717 6/30/2023 7,000 6,112 888 202,829 12/31/2023 7,000 6,085 915 201,913 6/30/2024 7,000 6,057 943 200,971 12/31/2024 7,000 6,029 971 200,000 What is the annual effective interest rate on the bonds? A) 3% B) 3.5% C) 6% D) 7%
Lopez Plastics Co. (LPC) issued callable bonds on January 1, 2021. LPC's accountant has projected the following amortization schedule from issuance until maturity: Cash Effective Decrease in Outstanding Date interest interest balance balance 1/1/2021 2$ 207,020 6/30/2021 7,000 2$ 6,211 789 206,230 12/31/2021 7,000 6,187 813 205,417 6/30/2022 7,000 6,163 837 204,580 12/31/2022 7,000 6,137 863 203,717 6/30/2023 7,000 6,112 888 202,829 12/31/2023 7,000 6,085 915 201,913 6/30/2024 7,000 6,057 943 200,971 12/31/2024 7,000 6,029 971 200,000 What is the annual stated interest rate on the bonds? A) 3.5% B) 6% C) 7% D) None of the answer choices is correct. %24 %24
Lopez Plastics Co. (LPC) issued callable bonds on January 1, 2021. LPC's accountant has projected the following amortization schedule from issuance until maturity: Cash Effective Decrease in Outstanding Date interest interest balance balance 1/1/2021 $ 207,020 6/30/2021 7,000 2$ 6,211 789 206,230 12/31/2021 7,000 6,187 813 205,417 6/30/2022 7,000 6,163 837 204,580 12/31/2022 7,000 ? .(omitted) ak 12/31/2024 200,000 ... LPC calls the bonds at 105 immediately after the interest payment on 12/31/2022 and retires them. What gain or loss, if any, would LPC record on this date? Row t A) No gain or loss is recognized upon early retirement of this debt B) $3,717 gain C) $6,283 loss D) $2,283 loss %24
Lopez Plastics Co. (LPC) issued callable bonds on January 1, 2021. LPC's accountant has projected the following amortization schedule from issuance until maturity: Date Cashinterest Effectiveinterest Decrease inbalance Outstandingbalance 1/1/2021 $ 207,020 6/30/2021 $ 7,000 $ 6,211 $ 789 206,230 12/31/2021 7,000 6,187 813 205,417 6/30/2022 7,000 6,163 837 204,580 12/31/2022 7,000 6,137 863 203,717 6/30/2023 7,000 6,112 888 202,829 12/31/2023 7,000 6,085 915 201,913 6/30/2024 7,000 6,057 943 200,971 12/31/2024 7,000 6,029 971 200,000 What is the annual effective interest rate on the bonds?
Lopez Plastics Co. (LPC) issued callable bonds on January 1, 2021. LPC's accountant has projected the following amortization schedule from issuance until maturity: Date Cash interest Effective interest Decrease in balance Outstanding balance 01-01-21 207,020 6/30/2021 7,000 6,211 789 206,230 12/31/2021 7,000 6,187 813 205,417 6/30/2022 7,000 6,163 837 204,580 12/31/2022 7,000 6,137 863 203,717 6/30/2023 7,000 6,112 888 202,829 12/31/2023 7,000 6,085 915 201,913 6/30/2024 7,000 6,057 943 200,971 12/31/2024 7,000 6,029 971 200,000 LPC calls the bonds at 103 immediately after the interest payment on 12/31/2022 and retires them. What gain or loss, if any, would LPC record on this date? Multiple Choice No gain or loss $3,717 gain $2,283 loss $6,000 loss
ony Hawk's Adventure (THA) issued callable bonds on January 1, 2021. THA's accountant has projected the following amortization schedule from issuance until maturity: Date cash paid Interest Expense Increase in carrying value carrying value 01/01/2021 $218,690 06/30/2021 $11,500 $13,121 $1,621 220,311 12/31/2021 11,500 13,219 1,719 222,030 06/30/2022 11,500 13,322 1,822 223,852 12/31/2022 11,500 13,431 1,931 225,783 06/30/2023 11,500 13,547 2,047 227,830 12/31/2023 11,500 13,670 2,170 230,000 THA issued the bonds for: Multiple Choice $230,000. $218,690. $299,000. Cannot be determined from the given information.
Lopez Plastics Co. (LPC) issued callable bonds on January 1, 2021. LPC's accountant has projected the following amortizatic schedule from issuance until maturity: Cash Effective Decrease in Date Outstanding interest interest balance balance 1/1/2021 24 207,020 6/30/2021 2$ 7,000 $4 6,211 24 789 206,230 12/31/2021 7,000 6,187 813 205,417 6/30/2022 7,000 6,163 837 204,580 12/31/2022 7,000 6,137 863 203,717 6/30/2023 7,000 6,112 888 202,829 12/31/2023 7,000 6,085 915 201,913 943 200,971 6/30/2024 7,000 6,057 971 200,000 7,000 6,029 12/31/2024 LPC issued the bonds:
Tony Hawk's Adventure (THA) issued callable bonds on January 1, 2021. THA's accountant has projected the following amortization schedule from issuance until maturity: Date Cash Paid InterestExpense Increase inCarrying Value Carrying value 01/01/2021 $341,728 06/30/2021 $14,400 $17,086 $2,686 344,414 12/31/2021 14,400 17,221 2,821 347,235 06/30/2022 14,400 17,362 2,962 350,197 12/31/2022 14,400 17,510 3,110 353,307 06/30/2023 14,400 17,665 3,265 356,572 12/31/2023 14,400 17,828 3,428 360,000 THA buys back the bonds for $345,005 immediately after the interest payment on 12/31/2021 and retires them. What gain or loss, if any, would THA record on this date? Multiple Choice $3,277 loss. $2,230 gain. $14,995 gain. No gain or loss.
Tony Hawk's Adventure (THA) issued callable bonds on January 1, 2021. THA's accountant has projected the following amortization schedule from issuance until maturity: Date Cash Paid InterestExpense Increase inCarrying Value CarryingValue 01/01/2021 332,789 06/30/2021 17,500 19,967 2,467 335,256 12/31/2021 17,500 20,115 2,615 337,871 06/30/2022 17,500 20,272 2,772 340,643 12/31/2022 17,500 20,439 2,939 343,582 06/30/2023 17,500 20,615 3,115 346,697 12/31/2023 17,500 20,803 3,303 350,000 THA issued the bonds for: Multiple Choice $350,000. $332,789. $455,000. Cannot be determined from the given information.
Tony Hawk's Adventure (THA) issued callable bonds on January 1, 2021. THA's accountant has projected the following amortization schedule from issuance until maturity: Date Cash Paid InterestExpense Increase inCarrying Value CarryingValue 01/01/2021 331,652 06/30/2021 10,500 13,266 2,766 334,418 12/31/2021 10,500 13,377 2,877 337,295 06/30/2022 10,500 13,492 2,992 340,287 12/31/2022 10,500 13,611 3,111 343,398 06/30/2023 10,500 13,736 3,236 346,634 12/31/2023 10,500 13,866 3,366 350,000 What is the annual market interest rate on the bonds? (Hint: Be sure to provide the annual rate rather than the six-month rate.) (Do not round your intermediate calculations.) Multiple Choice 6%. 3%. 7%. 8%.
X2 issued callable bonds on January 1, 2021. The bonds pay interest annually on December 31 each year. X2's accountant has projected the following amortization schedule from issuance until maturity: Date Cash Paid InterestExpense Decrease inCarrying Value CarryingValue 01/01/2021 124,380 12/31/2021 15,000 14,304 696 123,684 12/31/2022 15,000 14,224 776 122,907 12/31/2023 15,000 14,134 866 122,042 12/31/2024 15,000 14,035 965 121,076 12/31/2025 15,000 13,924 1,076 120,000 What is the annual market interest rate on the bonds? Multiple Choice 5.8%. 6.3%. 11.5%. 12.5%.
Devin Company computes the following bond interest amortization table for bonds issued on January 1, 2021. Use the information on this table to answer the questions below. Interest Cash Payment Payment Interest Decrease in Вook Date Amount Expense Discount Discount Value June 30, 2021 $360,000 $360,000 $360,000 $360,000 $360,000 $360,000 $360,000 $360,000 $441,068 $444,310 $447,683 $81,068 $84,310 $87,683 $91,190 $94,838 $98,631 $892,240 $807,929 $720,247 $629,056 $534,219 $435,587 $11,107,760 $11,192,071 $11,279,753 $11,370,944 $11,465,781 $11,564,413 $11,666,989 $11,773,669 $11,884,615 $12,000,000 Dec 31, 2021 June 30, 2022 $451,190 $454,838 $458,631 Dec 31, 2022 June 30, 2023 Dec 31, 2023 $462,577 $466,680 $102,577 $106,680 $333,011 $226,331 June 30, 2024 Dec 31, 2024 $360,000 $360,000 $470,947 $475,385 $110,947 $115,385 June 30, 2025 $115,385 Dec 31, 2025 $0 1. What journal entry will Devin make on June 30, 2022 to record the third interest payment? 2. When the bonds mature on…