Klaus Associates issued $ 500,000 parâ value, four â-year, âzero-coupon bonds on Januaryâ 1, 2016 . The market rate of interest on the date of the bond issue was 4 â%. Bond issue costs are $ 4,400. Theâ company's fiscal year ends on December 31
A. Determine the issue price of the debt
B. Prepare the amortization table for the bond issue, assumin that Klause uses the effective interest rate method of amortization.
C. Prepare the journal entries to record the bond issue and the entries on Decemberâ 31,2016 Assume the company uses a discount or premiumâ account, if needed.
D. Describe the incomeâ statement, balanceâ sheet, and cash flow statement effects of the bondâ issue, amortization of the bond issueâ costs, and the amortization of discount.
E. The bonds are retired early on April 30, 2017, for $ 461, 000. Prepare the journal entry.
Using Future Value of 1 table for 2016
Using Future Value of an Ordinary Annuity Table 2016
Using Future Value of an Annuity Due Table 2016
Present Value ofâ $1 table 2016
Present Value ofâ an Ordinary Annuity Table 2016
Present Value ofâ an Annuity Due Table 2016
Klaus Associates issued $ 500,000 parâ value, four â-year, âzero-coupon bonds on Januaryâ 1, 2016 . The market rate of interest on the date of the bond issue was 4 â%. Bond issue costs are $ 4,400. Theâ company's fiscal year ends on December 31
A. Determine the issue price of the debt
B. Prepare the amortization table for the bond issue, assumin that Klause uses the effective interest rate method of amortization.
C. Prepare the journal entries to record the bond issue and the entries on Decemberâ 31,2016 Assume the company uses a discount or premiumâ account, if needed.
D. Describe the incomeâ statement, balanceâ sheet, and cash flow statement effects of the bondâ issue, amortization of the bond issueâ costs, and the amortization of discount.
E. The bonds are retired early on April 30, 2017, for $ 461, 000. Prepare the journal entry.
Using Future Value of 1 table for 2016
Using Future Value of an Ordinary Annuity Table 2016
Using Future Value of an Annuity Due Table 2016
Present Value ofâ $1 table 2016
Present Value ofâ an Ordinary Annuity Table 2016
Present Value ofâ an Annuity Due Table 2016