Solution-Prepare the journal entry at the date of the bond

Prepare the journal entry at the date of the bond purchase

Reference no: EM133071040

Question - On January 1, 2020, Sage Company purchased 10% bonds having a maturity value of $420,000, for $453,537.42. The bonds provide the bondholders with a 8% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Sage Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category.

Required -

(a) Prepare the journal entry at the date of the bond purchase.

(b) Prepare a bond amortization schedule.

(d) Prepare the journal entry to record the interest revenue and the amortization at December 31, 2021.

Reference no: EM133071040

Questions Cloud

Demonstrates significant impact that organization can have : Demonstrates the significant impact that organization can have on families affected by cancer - aware of aspects of the community because they do not work

What is the re-order point : Darren Company uses 36,000 yards of canvas each month to make tents. If the desired safety stock is 5,000 yards, what is the re-order point

What was the depletion expense : Assumed 40,000 units of the natural resource. What was the depletion rate per unit? What was the depletion expense for 2017

Design your structure to survive under the designed waves : Design your structure to survive under the designed waves - Feel free to select ANY location on earth to complete your design for the selected type of structure

Prepare the journal entry at the date of the bond purchase : Sage Company purchased 10% bonds having a maturity value of $420,000, for $453,537.42. Prepare the journal entry at the date of the bond purchase

Calculate the fixed overhead spending variance : The standard fixed overhead per unit is $10.40 (2 hours at $5.20 per hour). Calculate the fixed overhead spending (budget) variance

Compute the annual finance charge or annual finance cost : Compute the annual finance charge or annual finance cost of paying on the 5th day and taking the trade discount on an invoice of P50,000.00

What is the net present value of accepting the special order : X Company has an opportunity to accept a special order that will result in immediate profit of $67,000. What is net present value of accepting special order

On what date does this note mature : Sylvestor Systems borrows $187,000 cash on May 15 by signing a 180-day, 6%, $187,000 note. On what date does this note mature

User Account

All Pages

Prepare the journal entry at the date of the bond purchase

Reference no: EM133071040

Reference no: EM133071040

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

How much control does fed have over this longer real rate

Coures:- fundamental accounting principles

Accounting problems

Theory of interest - term structure of interest rates

Write a report on internal controls

Prepare the bank reconciliation for company

Cost-benefit analysis

Theory of interest

Liquidity and profitability

What is the expected risk premium on the portfolio

Simple interest and compound interest

Capm and venture capital

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT