Kelvin Company borrowed money by issuing $2,500,000 of 6% bonds payable at 101.2

Question

Kelvin Company borrowed money by issuing $2,500,000 of 6% bonds payable at 101.2 on July 1, 2016 The bonds are five-year bonds and pay interest each January 1 and July 1 1. How much cash did Kelvin receive when it issued the bonds payable? Journalize this transaction. 2. How much must Kelvin pay back at maturity? When is the maturity date? 3. How much cash interest will Kelvin pay each six months? 4. How much interest expense will Kelvin report each six months? Assume the straight-line amortization method. Journalize the entries for accrual of interest and amortization of premium on December 31, 2016, and payment of interest on January 1, 2017. 1. How much cash did Kelvin receive when it issued the bonds payable? Journalize this transaction Kelvin received $ when the bonds payable were issued

Explanation / Answer

1. Kelvin received when bonds payable issued :

Amount received = (2500000*101.20/100) = 2530000

so kelvin received $2530000 When the bonds payable were issued

Related Questions

Navigate

• Browse (All)
• Browse K
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.