Prepare the journal entry for the issuance assuming the

Reference no: EM13573366

Towel Enterprises issued 9%, 5-year, $2,000,000 par value bonds that pay interest semiannually on October 1 and April 1. The bonds are dated April 1, 2011, and are issued on that date. The discount rate of interest for such bonds on April 1, 2011, is 8%. What cash proceeds did Towel Enterprises receive from issuance of the bonds?

On July 1, 2011, Hobbit Company issued $600,000, 6%, 10-year bonds at face value. Interest is payable semiannually on January 1 and July 1. Hobbit Corporation has a calendar year end.

Prepare all entries related to the bond issue for 2011.

On January 1, 2011, Metal Gear Company issued bonds with a face value of $800,000. The bonds carry a stated interest of 7% payable each January 1 and July 1.

a. Prepare the journal entry for the issuance assuming the bonds are issued at 97.b. Prepare the journal entry for the issuance assuming the bonds are issued at 102.

Andy Dick sells televisions with a 2-year warranty. Past experience indicates that 2% of the units sold will be returned during the warranty period for repairs. The average cost of repairs under warranty is estimated to be $50 per unit. During 2011, 12,000 units were sold at an average price of $400. During the year, repairs were made on 70 units at a cost of $4,000.

Prepare journal entries to record the repairs made under warranty and estimated warranty expense for the year.

On January 1, 2011, Doctor X issued 8%, 20-year bonds with a face amount of $5,000,000 at 101. Interest is payable semiannually on June 30 and December 31.

Prepare the entries to record the issuance of the bonds and the first semiannual interest payment assuming that the Doctor uses straight-line amortization.

On January 1, 2011, Pacman Enterprises issued 9%, 10-year bonds with a face amount of $900,000 at 96. Interest is payable semiannually on June 30 and December 31. The bonds were issued for an effective interest rate of 10%.

Prepare the entries to record the issuance of the bonds and the first semiannual interest payment assuming that the company uses effective-interest amortization.

Spanner Company issued $1,000,000, 10%, 2-year bonds which pay interest semiannually. Compute the amount at which the bonds would sell if investors required a rate of return of 8%.

Reference no: EM13573366

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