What is the journal entry required to record first interest

Assignment Help Financial Accounting
Reference no: EM132968575

Problem 1: Game Corp. issued $5000 in principal of 4% 5-year junior notes with annual payments. Investors paid par to purchase the bonds and $300 in issuance costs were paid directly from the proceeds of the bond sale, which implied a 5.4% discount rate on the debt. What is the journal entry required to record the first interest payment?

Option 1: Cr. Cash -- $200

Option 2: Cr. Debt payable -- $923

Option 3: Dr. Interest expense -- $254

Option 4: Cr. Discount on debt payable -- $54

Option 5: Cr. Cash -- $260

Option 6: Dr. Bond issuance expense -- $60

Reference no: EM132968575

Questions Cloud

Report of a Business Marketing Strategy Case : Report of a Business Marketing Strategy Case - select a business case which can be from media channels, journal articles or textbooks
Which is not associated with abc : Which is NOT associated with ABC? Activity-Based-Costing (ABC) is a cost allocation system that is designed to allocate overhead costs to activities
What are the earnings and cash flows for firm in year two : the firm pays 20 percent of its earnings in taxes. What are the earnings and cash flows for the firm in years 2 and 5, using the two methods of depreciation?
What is their alternative minimum taxable income : They also purchased 100 shares of Facebook stock on January 1, 2012 at $20 per share. What is their Alternative minimum taxable income
What is the journal entry required to record first interest : What is the journal entry required to record the first interest payment? Game Corp. issued $5000 in principal of 4% 5-year junior notes
What is the transaction price for the contract : Assuming that Gotham Excavation & Construction Co. uses the most-likely approach, what is the transaction price for this contract?
Calculate the current price of instrument b : Calculate the current price of instrument B per $100 face value. Round your answer to four decimal places. Assume the yield rate is j2 = 2.86% p.a.
What carrying value did cephalopod bank mark : What carrying value did Cephalopod Bank mark its investment in Can't Even at the end of 2021. Cephalopod Bank purchased a 23% stake in Can't Even Inc
How much was basic earnings per share : On January 1, 2017, Elemeno Inc. had 6000 shares of common stock authorized, 5500 shares of common stock. How much was Basic Earnings per Share?

Reviews

Write a Review

Financial Accounting Questions & Answers

  What net reduction in retained earnings would result

Silver was P14 per share, there were 180,000 shares of Lone outstanding. What NET reduction in retained earnings would result from this property dividend?

  What is the total asset turnover ratio

If Apex, Inc. has an ROE = 10 percent, equity multiplier = 3, and profit margin of 5 percent, what is the total asset turnover ratio?

  How you consider accounting regulation

You are to explore the annual report disclosures for one of the NZX 50companies for 2012. You are required to choose the company. The annual reports areavailable online.

  Prepare the consolidated balance sheet of redcliff ltd

Prepare the consolidated balance sheet of Redcliff Ltd and its subsidiary as at 31 December 20X4. Redcliff Ltd acquired the entire share capital of ABC Ltd

  Assume estate construction is constructing a building

1.Assume Estate Construction is constructing a building for CyberB, an online retailing company.

  Make the journal entry required to be made on december

Capa Solo Inc. had decided to always first carryback losses, Prepare the journal entry required to be made on December 31, 2017 to record this situation.

  Determine the amount of any goodwill impairment

Alomar Co., a consolidated enterprise, conducted an impairment review for each of its reporting units. In its qualitative assessment, one particular reporting unit, Sellers, emerged as a candidate for possible goodwill impairment. Determine the amoun..

  Why are the generally accepted accounting principles

Why are the Generally Accepted Accounting Principles (USA) and the International Standards (Europe) so important in today's business world?

  What is the price of the stock today for faulkner corp

The stock has a required rate of return of 12 percent. Assuming that the stock is fairly valued, what is the price of the stock today?

  What is its EBITDA coverage ratio

A company has EBITDA of 600 million, interest payment s of 60 million, lease payments of 40 million, What is its EBITDA coverage ratio

  Record entry of new engine and depreciation adjustment

Record entry of new engine and depreciation adjustment. The truck had been purchased in 2005 at a cost of $125,000, with a 20-year life

  Elucidate the amount of bad debts expense for that period

Using the percentage of receivables method for recording bad debts expense, estimated uncollectible accounts are $25,000. If the balance of the Allowance for Doubtful Accounts is $8,000 debit before adjustment, what is the amount of bad debts expe..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd