Exercise 14-9 (Algo) Issuance of bonds; effective interest; amortization schedule; financial statement effects [LO14-2] When Patey Pontoons issued 4% bonds on January 1, 2024, with a face amount of $520,000, the market yield for bonds of similar risk and maturity was 5%. The bonds mature December 31, 2027 (4 years). Interest is paid semiannually on June 30 and December 31. Required: 1. Determine the price of the bonds at January 1, 2024. 2. Prepare the journal entry to record their issuance by Patey on January 1, 2024. 3. Prepare an amortization schedule that determines interest at the effective rate each period. 4. Prepare the journal entry to record interest on June 30, 2024. 5. What is the amount related to the bonds that Patey will report in its balance sheet at December 31, 2024? 6. What is the amount related to the bonds that Patey will report in its income statement for the year ended December 31, 2024? (Ignore income taxes.) 7. Prepare the appropriate journal entries at maturity on December 31, 2027. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4 Req 5 and 6 Req 7 Determine the price of the bonds at January 1, 2024. Note: Round final answers to the nearest whole dollar. Round your percentage answer to one decimal place. Table values are based on:
Exercise 14-9 (Algo) Issuance of bonds; effective interest; amortization schedule; financial statement effects [LO14-2] When Patey Pontoons issued 4% bonds on January 1, 2024, with a face amount of $520,000, the market yield for bonds of similar risk and maturity was 5%. The bonds mature December 31, 2027 (4 years). Interest is paid semiannually on June 30 and December 31. Required: 1. Determine the price of the bonds at January 1, 2024. 2. Prepare the journal entry to record their issuance by Patey on January 1, 2024. 3. Prepare an amortization schedule that determines interest at the effective rate each period. 4. Prepare the journal entry to record interest on June 30, 2024. 5. What is the amount related to the bonds that Patey will report in its balance sheet at December 31, 2024? 6. What is the amount related to the bonds that Patey will report in its income statement for the year ended December 31, 2024? (Ignore income taxes.) 7. Prepare the appropriate journal entries at maturity on December 31, 2027. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4 Req 5 and 6 Req 7 Determine the price of the bonds at January 1, 2024. Note: Round final answers to the nearest whole dollar. Round your percentage answer to one decimal place. Table values are based on:
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 68E: Exercise Bonds with Annual Interest Payments Kiwi Corporation issued at par $350,000, 9% bonds on...
Related questions
Question
![Exercise 14-9 (Algo) Issuance of bonds; effective interest; amortization schedule; financial statement
effects [LO14-2]
When Patey Pontoons issued 4% bonds on January 1, 2024, with a face amount of $520,000, the market yield for bonds of similar risk
and maturity was 5%. The bonds mature December 31, 2027 (4 years). Interest is paid semiannually on June 30 and December 31.
Required:
1. Determine the price of the bonds at January 1, 2024.
2. Prepare the journal entry to record their issuance by Patey on January 1, 2024.
3. Prepare an amortization schedule that determines interest at the effective rate each period.
4. Prepare the journal entry to record interest on June 30, 2024.
5. What is the amount related to the bonds that Patey will report in its balance sheet at December 31, 2024?
6. What is the amount related to the bonds that Patey will report in its income statement for the year ended December 31, 2024?
(Ignore income taxes.)
7. Prepare the appropriate journal entries at maturity on December 31, 2027.
Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Complete this question by entering your answers in the tabs below.
Req 1
Req 2
Req 3
Req 4
Req 5 and 6
Req 7
Determine the price of the bonds at January 1, 2024.
Note: Round final answers to the nearest whole dollar. Round your percentage answer to one decimal place.
Table values are based on:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1040cf11-1606-4441-95c2-42fee370d18a%2F724bcc2c-b5aa-4d53-baf3-61d6abddfa5f%2F71vix2d_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 14-9 (Algo) Issuance of bonds; effective interest; amortization schedule; financial statement
effects [LO14-2]
When Patey Pontoons issued 4% bonds on January 1, 2024, with a face amount of $520,000, the market yield for bonds of similar risk
and maturity was 5%. The bonds mature December 31, 2027 (4 years). Interest is paid semiannually on June 30 and December 31.
Required:
1. Determine the price of the bonds at January 1, 2024.
2. Prepare the journal entry to record their issuance by Patey on January 1, 2024.
3. Prepare an amortization schedule that determines interest at the effective rate each period.
4. Prepare the journal entry to record interest on June 30, 2024.
5. What is the amount related to the bonds that Patey will report in its balance sheet at December 31, 2024?
6. What is the amount related to the bonds that Patey will report in its income statement for the year ended December 31, 2024?
(Ignore income taxes.)
7. Prepare the appropriate journal entries at maturity on December 31, 2027.
Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Complete this question by entering your answers in the tabs below.
Req 1
Req 2
Req 3
Req 4
Req 5 and 6
Req 7
Determine the price of the bonds at January 1, 2024.
Note: Round final answers to the nearest whole dollar. Round your percentage answer to one decimal place.
Table values are based on:
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
Recommended textbooks for you
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial & Managerial Accounting
Accounting
ISBN:
9781285866307
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning