On 1 January 2010, Quanta Services Inc. issues £1,000,000 face value, five-year bonds with annual interest payments of £55,000 to be paid each 31 December. The market interest rate is 6.0 percent. Using the effective interest rate method of amortization, the value of the liability on 31 December 2010 will be closest to £ Select one: O a. 978,938 O b. 1,000,000 O c. 800,000 O d. 982,674
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- Debond Corp. issues £1,000,000 face value of fi ve-year bonds, dated 1 January 2010,when the market interest rate is 6 percent. Th e sales proceeds are £957,876. Th e bondspay 5 percent interest annually on 31 December.1 . What is the interest payment on the bonds each year?2 . What amount of interest expense on the bonds would be reported in 2010 and 2011using the eff ective interest rate method?3 . Determine the reported value of the bonds (i.e., the carrying amount) at 31 December 2010 and 2011, assuming the eff ective interest rate method is used to amortisethe discount.4 . What amount of interest expense on the bonds would be reported under thestraight-line method of amortising the discount?Prembond Corp. issues £1,000,000 face value of fi ve-year bonds, dated 1 January 2010,when the market interest rate is 4 percent. Th e sales proceeds are £1,044,518. Th e bondspay 5 percent interest annually on 31 December.1 . What is the interest payment on the bonds each year?2 . What amount of interest expense on the bonds would be reported in 2010 and 2011using the eff ective interest rate method?3 . Determine the reported value of the bonds (i.e., the carrying amount) at 31 December2010 and 2011, assuming the eff ective interest rate method is used to amortise thepremium.On January 1, 2020, the company issued $2,500,000 6% bonds with a 10-year maturity. The bonds were issued to investors that require an effective interest rate of 8%. Interest is paid annually and the accountant did not record the interest payment transaction. The effective interest method is used to amortized any premium or discount. Would the PV calculation be PV: ? 2,164,496 rate: 6% Pmt: 150,000 FV: 2,500,000 type: 0
- 21. On January 01, 2019, SUNOD NA ANG LEASES LTD. issued 3- year bonds with face value of P5,000,000 at 99. The nominal rate is 10% and the interest is payable annually on December 31. Additionally, it paid bond issue cost of P150,000. Suppose the bonds were issued in the amount of P5,407,550. What is the present value of the bonds? * a. P5,000,000 at face amount since as a general rule, when the problem is silent, stated rate is equal to effective rate. b. P5,407,550 is the present value. Bond issue cost should be included in the computation of the present value since under the effective interest method; this cost should be lumped together with the discount, or netted against the premium, as the case may be. c. P5,257,550 is the present value. With the nominal rate at 10%, it is understood that the bonds were issued at a premium to be amortized using the rate contained in the bond certificate. d. None of the scenarios above is correct. They are just simply "epal" and "pampalito".On January 1, 2021, LMN Company issued 10-year bonds with a face amount of P3,000,000 at a stated interest rate of 8% payable annually on January 1. The bonds were priced to yield 10%. Present value factors are as follows: Present value of P1 for 10 periods Present value of an ordinary annuity of P1 for 10 periods At 8%. 0.46326.7101 At 10%0.38556.1446 The total issue price of the bonds was:Debond Corp. issues £1,000,000 worth of fi ve-year bonds, dated 1 January 2010, whenthe market interest rate on bonds of comparable risk and terms is 6 percent. Th e bondspay 5 percent interest annually on 31 December. What are the sales proceeds of thebonds when issued, and how is the issuance refl ected in the fi nancial statements?
- On January 1, 2022 Company K issued $1,000,000, 5% bonds for $855,000. The market rate of interest for these bonds is 7%. Interest is payable annually on December 31. If Company K uses the effective-interest method of amortizing bond discount, what would be the remaining unamortized bond discount at December 31, 2022? A. $135,150 B. $235,000 C. $238,050 D. $134,500On December 31, 2018, when the market interest rate is 10%, Willis Realty issues $1,000,000 of 11.25%, 10-year bonds payable. The bonds pay interest semiannually. Willis Realty received $1,077,988 in cash at issuance. Requirements 1. Prepare an amortization table using the effective interest amortization method for the first two semiannual interest periods. (Round to the nearest dollar.) 2. Using the amortization table prepared in Requirement 1, journalize issuance of the bonds and the first two interest payments. Requirement 1. Prepare an amortization table using the effective interest amortization method for the first two semiannual interest periods. (Round to the nearest dollar.) Interest Carrying Cash Paid Expense Amortized Amount 12/31/2018 06/30/2019 12/31/2019 Requirement 2. Using the amortization table prepared in Requirement 1, journalize issuance of the bonds and the first two interest payments. (Record debits first, then credits. Select explanations on the last line of the…The following are two independent situations. 1. 2. Crane plc. redeemed £121,000 face value, 10% bonds on June 30, 2020, at 102. The carrying value of the bonds at the redemption date was £108,500. The bonds pay annual interest, and the interest payment due on June 30, 2020, has been made and recorded. For each independent situation above, prepare the appropriate journal entry for the redemption of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) 1. Tastove Inc. redeemed £155,000 face value, 11% bonds on June 30, 2020, at 96. The carrying value of the bonds at the redemption date was £157,650. The bonds pay annual interest, and the interest payment due on June 30, 2020, has been made and recorded. No. Account Titles and Explanation 2. Debit Credit NAR
- On December 31, 2019, Potter Corporation issued €2,000,000, 6%, 5-year bonds for €1,840,324. The bonds were sold to yield an effective-interest rate of 8%. Interest is paid annually on December 31. The company uses the effective-interest method of amortization. Q1. Prepare a bond discount amortization schedule which shows the amortization of discount for the first interest payment date. Q2. Prepare the journal entries that Potter corporation would make on December 31, 2019 and December 31, 2020 related to the bond.15. On January 1, 2012, when the market rate for bond interest was 12%, Victoria Corporation issued P10 million face amount of bonds with interest to be paid semiannually at a 10% annual rate. The bonds mature on December 31, 2021 and were issued at a discount of P1,145,000. How much of the discount should be amortized by the interest method at July 1, 2012? * a. P11,450 O b. P31,300 c. P57,250 d. P696,667On January 01, 2019, IDAMAY KO NA RIN PO SI PAPA CO. issued 10-year bonds with a face amount of P1 million and a stated interest rate of 8% payable annually on January 1. The bonds were priced to yield 10%.The total issue price (rounded to the nearest P100) of the bonds was: a. P1,000,000 b. P980,000 c. P965,800 d. P877,100