(Solution) 14-9 On June 30, 2017, Coronado Company Issued $4,100,000 Face Value Of 13%, 20-year Bonds At $4,408,441, A Yield Of 12%. | Snapessays.com


(Solution) 14-9 On June 30, 2017, Coronado Company issued $4,100,000 face value of 13%, 20-year bonds at $4,408,441, a yield of 12%.


14-9On June 30, 2017, Coronado Company issued $4,100,000 face value of 13%, 20-year bonds at $4,408,441, a yield of 12%. Coronado uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31.Prepare the journal entries to record the following transactions. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)(1)The issuance of the bonds on June 30, 2017.(2)The payment of interest and the amortization of the premium on December 31, 2017.(3)The payment of interest and the amortization of the premium on June 30, 2018.(4)The payment of interest and the amortization of the premium on December 31, 2018.No.DateAccount Titles and ExplanationDebitCredit(1)June 30, 2017(2)December 31, 2017(3)June 30, 2018(4)December 31, 2018Show the proper balance sheet presentation for the liability for bonds payable on the December 31, 2018, balance sheet. (Round answers to 0 decimal places, e.g. 38,548.)Coronado CompanyBalance Sheet December 31, 2018For the Year Ended December 31, 2018For the Quarter Ended December 31, 2018 Current AssetsCurrent LiabilitiesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' Equity$ Premium on Bonds PayableLoss on Redemption of BondsInterest ExpenseBad Debt ExpenseDiscount on Notes PayableNotes PayableInterest PayableNotes ReceivableBook Value of Bonds PayableCash$Provide the answers to the following questions.(1) What amount of interest expense is reported for 2018? (Round answer to 0 decimal places, e.g. 38,548.)Interest expense reported for 2018$(2) Will the bond interest expense reported in 2018 be the same as, greater than, or less than the amount that would be reported if the straight-line method of amortization were used?The bond interest expense reported in 2018 will be  greater thanless thansame as the amount that would be reported if the straight-line method of amortization were used.(3) Determine the total cost of borrowing over the life of the bond. (Round answer to 0 decimal places, e.g. 38,548.)Total cost of borrowing over the life of the bond$(4) Will the total bond interest expense for the life of the bond be greater than, the same as, or less than the total interest expense if the straight-line method of amortization were used?The total bond interest expense for the life of the bond will be  greater thanless thanthe same as the total interest expense if the straight-line method of amortization were used.

 


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This question was answered on: May 23, 2022

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