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Bonds Payable_Issue and Redemption




Question;1. (1 point);On January 1, 2014, Peter Co. issued;6% bonds with a face value of $450,000 when the market interest rate was 4%.;The bonds are due in seven years and;interest is payable every June 30 and December 31. The effective interest method;is used to amortize any bond premium or discount.;Required:Calculate the selling;price of the bonds and indicate the associated accounts and dollar amounts to;be reported on the Income Statement for the year ended December 31, 2015, and;on the December 31, 2015, Balance Sheet. Round all amounts to the nearest;dollar.;Selling Price: $;Account;Name ($);Income Statement;Balance Sheet;2. (1 point);On January 1, 2014, Piper Co. issued;7% bonds with a face value of $700,000 for $671,612 when the market rate of interest;was 8%. Interest is payable on June 30 and December 31, and the effective;interest method is used to amortize the bond discount. The December 31, 2016;balance sheet of Piper Co. included the following items;Bonds payable, due December 31, 2018 $700,000;Unamortized discount on bonds payable 12,704;On April 1, 2017, Piper retired all of;the bonds at 96 plus accrued interest.;Required:Prepare the necessary;journal entries for the April 1, 2017, bond retirement.


Paper#37237 | Written in 18-Jul-2015

Price : $20