Compute the balance sheet value of the bond liability

Assignment Help Financial Accounting

Reference no: EM131296167

Tin Corp. issued 100 five-year bonds on July 1, 2015. The interest payments are due semiannually (Jan 1 and July 1) at an annual rate of 8 percent. The effective interest rate on the bonds is 6 percent. The face value of each bond is $1,000.

A. Prepare the journal entry that would be recorded on July 1, 2015, when the bonds are issued.

B. Prepare the journal entry that would be recorded on December 31, 2015.

C. Compute the balance sheet value of the bond liability of December 31, 2015

D. What is the present value of the bond’s remaining cash flows as of December 31, 2015 using the effective interest rate?

Reference no: EM131296167

Questions Cloud

Estimate of variable consideration and transaction price : Thomas Consultants provided Bran Construction with assistance in implementing various cost-savings initiatives. Thomas’ contract specifies that it will receive a flat fee of $54,000 and an additional $24,000 if Bran reaches a prespecified target amou..

Discuss risk associated with being over or under leveraged : f you were a small business owner would you implement an activity-based costing system. What potential benefits or pitfalls do you foresee? Discuss the risk associated with being over or under leveraged.

Cash controls-bank reconciliations and special cash funds : The elements of internal control are very important in business due to the passage of the Sarbanes Oxley Act. Internal controls involve protection of a company’s assets. In this Discussion, you will look at cash controls, bank reconciliations, and sp..

Distinguishing characteristics of variable-fixed : What are the distinguishing characteristics of variable, fixed, and semivariable factory overhead costs? What effect does a change in volume have on total variable, fixed, and semivariable costs?

Compute the balance sheet value of the bond liability : Tin Corp. issued 100 five-year bonds on July 1, 2015. The interest payments are due semiannually (Jan 1 and July 1) at an annual rate of 8 percent. The effective interest rate on the bonds is 6 percent. The face value of each bond is $1,000. Compute ..

Accounts receivable and estimated uncollectible accounts : Fey Corporation has aged its accounts receivable and estimated uncollectible accounts as follows (in thousands). What bad debt expense should the company report for the current period?

Catering service on the accrual method : Bob operates a catering service on the accrual method. In November of year 1 Bob received a payment of $9,000 for 18 months of catering services to be rendered from December 1" of year 1 through May 31" year 3. When must Bob recognize the income if h..

Values per share of the preferred stock and common stock : If two years’ preferred dividends are in arrears and the preferred stock is callable at $65 per share, what are the book values per share of the preferred stock and the common stock? Raphael Corporation’s common stock is currently selling on a stock ..

Retailer sells expensive electronic circuit component : An online retailer sells an expensive electronic circuit component called EX123. Once every 3 months, a shipment of components is made to this retailer. Past data shows that the demand for EX123 over a 3-month interval is normally distributed with a ..

User Account

All Pages