Rodgers Corporation produces and sells football equipment. On July 1, Year 1, Ro
ID: 2413647 • Letter: R
Question
Rodgers Corporation produces and sells football equipment. On July 1, Year 1, Rodgers Corporation issued $51,200,000 of 10-year, 14% bonds at a market (effective) interest rate of 12%, receiving cash of $57,072,353. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Required:
For all journal entries with a compound transaction, if an amount box does not require an entry, leave it blank.
SpringFit Corporation DESCRIPTION POST. REF CREDIT EQUITY Jan. 1 Cash 1,008,960.00 Premium on Bonds Payable 58,960.00 Bonds Payable 950,000.00 Jun. 30 nterest Expense 18,427.00 Premium on Bonds Payable 21,375.00 Jul. 1 Cash 1,729,164.00 Discount on Bonds Payable 70,836.00 Bonds Payable 1,800,000.00 Oct.1 Cash 1,100,000.00 Notes Payable 1,100,000.00 Dec.31 Interest Expense 18,427.00 Premium on Bonds Payable 21,375.00 31 Interest Expense 16,500.00 Interest Payable 16,500.00 31 Interest Expense 37,403.00 Discount on Bonds Payable 5,903.00 31,500.00 31 Income Summary 90,757.00 Interest Expense 90,757.00Explanation / Answer
1 Cash 57,072,353 Premium on Bonds Payable 5,872,353 Bonds Payable 51,200,000 2a Interest Expense 3,290,382 Premium on Bonds Payable* 293,618 Cash** 3,584,000 *$5,872,353 ÷ 20 semiannual periods ** 51200000 x 14% x 1/2 = 3584000 2b Interest Expense 3,290,382 Premium on Bonds Payable* 293,618 Cash 3,584,000 *$5,872,353 ÷ 20 semiannual periods 3 $3,290,382 5 Present value of $1 for 20 semiannual periods at 6% semiannual rate 0.31180 Face amount of bonds × $51,200,000 $15,964,160 Present value of annuity of $1 for 20 semiannual periods at 6% semiannual rate 11.46992 Semiannual interest payment × $ 3,584,000 41,108,193 Proceeds of bond issue $57,072,353
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.