Reference no: EM132597340
Questions -
Q1- Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson Co. issued $840,000 of 10-year, 4% bonds on May 1 of the current year at face value, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year.
Journalize the entries to record the following selected transactions for the current year. Refer to the Chart of Accounts for exact wording of account titles.
May 1 Issued the bonds for cash at their face amount.
Nov. 1 Paid the interest on the bonds.
Dec. 31 Recorded accrued interest for two months.
Q2- On the first day of its fiscal year, Chin Company issued $17,000,000 of five-year, 5% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 7%, resulting in Chin Company receiving cash of $15,586,199.
a- Journalize the entries to record the following:
-Issuance of the bonds.
-First semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.)
-Second semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.)
b- Determine the amount of the bond interest expense for the first year.
c- Why was the company able to issue the bonds for only $15,586,199 rather than for the face amount of $17,000,000?
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: On the first day of its fiscal year, Chin Company issued $17,000,000 of five-year, Determine the amount of the bond interest expense
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