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General Accounting Discussions: Bonds

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    • CommentAuthorJill
    • CommentTimeApr 3rd 2008
     
    Can someone please help me, I am confused!!!

    On January 2, 2008, a company issued $500,000, 10 year bonds for $574,540. The bonds pay interest on June 30 and December 31. The face rate is 8%, and the market rate is 6%.

    A. What is the interest expense on the bonds at June 30, 2008.
    B. What is the annual cash payment ( paid in semiannual payments) on the bonds.
    C. What is the carrying value of he bonds at the end of 10 years.
    D. If the Co. redeems the bonds at a call price of 102 at Dec. 31, 2008, what is the amount of the gain or loss.
    Thankful People: henderson
    • CommentAuthorhenderson
    • CommentTimeOct 19th 2008
     
    Jill did you receive help on these quetions
  3.  
    Here is a step by step tutorial on how on how to compute everything from the interest expense, interest cash payment, amortization and carrying value along with the appropriate journal entry formats and a link to tying tutorial on how to compute the issue price of the bond.

    http://vitalbusinessinfo.blogspot.com/2009/10/accounting-for-bonds.html
    • CommentAuthorCounter
    • CommentTimeNov 6th 2009
     
    Another place to get great information on bonds payable is AccountingCoach.com. The site is free and it has an Explanation of Bonds Payable, and Drills on Bonds Payable.

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