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On January 1, 2014, Floppy Co. issued 4% bonds with a face valueof $400,000 when the market interest rate was 6%. The bonds are duein ten years, and interest is payable every Januarey 1 and June 30.Floppy does not elect the fair value option for reporting itsfinancial liabilities. Do not provide any journal explanations. Ifno entry is necessary, write "no entry." Round all numbers to thenearest dollar.

Required:

a. Prepare the journal entries for the bond issue on January 1,2014.

b. Prepare the journal entry for the interest payment on June30, 2016.

c. Prepare any required end of 2016 adjusting entry.

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Beverley Smith
Beverley SmithLv2
28 Sep 2019

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On January 1, 2016, Bishop Company issued 12% bonds datedJanuary 1, 2016, with a face amount of $100,000. The bonds maturein 2020 (5 years). For bonds of similar risk and maturity, themarket yield is 14%. Interest is paid semiannually on June 30 andDecember 31. Required:

1. Determine the price of the bonds at January 1, 2016

. 2. Prepare the journal entry to record the bond issuance byBishop on January 1, 2016.

3. Prepare the journal entry to record interest on June 30,2016, using the straight line method.

4. Prepare the journal entry to record interest on December 31,2016, using the straight line method.

On January 1, 2016, Bishop Company issued 12% bonds datedJanuary 1, 2016, with a face amount of $100,000. The bonds maturein 2020 (5 years). For bonds of similar risk and maturity,themarket yield is 10%. Interest is paid semiannually on June 30 andDecember 31 . (SHOW AMORITIZATION SCHEDULE)

Required:

1. Determine the price of the bonds at January 1, 2016.

2. Prepare the journal entry to record the bond issuance byBishop on January 1, 2016.

3. Prepare the journal entry to record interest on June 30,2016, using the effective interest method method.

4. Prepare the journal entry to record interest on December 31 ,2016, using the effective interest method.

On January 1, 2016, Bishop Company issued 12% bonds datedJanuary 1, 2016, with a face amount of $100,000. The bonds maturein 2020 (5 years). For bonds of similar risk and maturity,themarket yield is 14%. Interest is paid semiannually on June 30 andDecember 31 .

Required:

1. Determine the price of the bonds at January 1, 2016.

2. Prepare the journal entry to record the bond issuance byBishop on January 1, 2016.

3. Prepare the journal entry to record interest on June 30,2016, using the Straight line method.

4. Prepare the journal entry to record interest on December 31 ,2016, using the straight line method.

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