What bonds payable amount will serotta report

Assignment Help Accounting Basics

Reference no: EM131975550

Problem

Serotta Corporation is planning to issue bonds with a face value of $480,000 and a coupon rate of 16 percent. The bonds mature in two years and pay interest quarterly every March 31, June 30, September 30, and December 31. All of the bonds were sold on January 1 of this year. Serotta uses the effective-interest amortization method and also uses a premium account. Assume an annual market rate of interest of 12 percent.

1) Record the issuance of the bonds on January 1.

2) Provide the journal entry to record the interest payment on March 31, June 30, September 30, and December 31 of this year.

3) What bonds payable amount will Serotta report on this year's December 31 balance sheet?

Reference no: EM131975550

Questions Cloud

Prepare a direct method cash flow statement for the month : Prepare a direct method Cash Flow Statement for the month. Prepare an Income Statement for the month of May.

How many shares or stock will be outstanding : A firm has a market value equal book value excess of $800, other assets or ss.200. and equry of $6.000.The firm has 600 shares of stock outstanding.

Corresponding market values and durations : Consider the following bonds with their corresponding market values and durations:

What is the firm operating cash flow : A firm has net sales of $25,000, costs of goods sold of $10,000, selling, general and administrative expenses of $8000 (of which $2000 are depreciation expense)

What bonds payable amount will serotta report : Record the issuance of the bonds on January 1. What bonds payable amount will Serotta report on this year's December 31 balance sheet?

Specifically focusing on return on investment : Why is it important to analyze profitability, specifically focusing on return on investment? Invoke the breakdown of ROI in thinking about your response.

Why should the company implement the new system : Given the current volume of business, should the company implement the new system? Explain. Should the new system be implemented? Explain.

What is the effective annual rate on the arrangement : A firm sells its $1,080,000 receivables to a factor for $1,015,200. The average collection period is 1 month.

List two reasons why you might prefer irr over npv : List two reasons why you might prefer IRR over NPV. List two reasons why you might prefer NPV over IRR.

User Account

All Pages