Bonds issued at premium
[DOC File]BONDS & L-T NOTES
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Assume that convertible bond was issued at a premium: Cash $105,000. Premium on….. $ 5,000. Convertible Bonds Payable 100,000. When converted: (shares issued are recorded at BV of bonds retired) Convert. Bonds payable $100,000. Premium on.. 4,300. Common Stock—par ($1/share) $ 2,000. Additional paid-in capital 102,300
[DOC File]accountingreviewmaterials « Be a CPA with or without a ...
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31. Stone, Inc. issued bonds with a maturity amount of $200,000 and a maturity ten years from date of issue. If the bonds were issued at a premium, this indicates that. a. the effective yield or market rate of interest exceeded the stated (nominal) rate. b. the nominal rate of interest exceeded the market rate. c. the market and nominal rates ...
[DOCX File]State Agency
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Our state recently issued transportation bonds at a significant premium and is considering spending that premium on transportation projects rather that setting it aside for the debt service and thereby lowering the true interest cost on those bonds. Amounts normally appropriated for transportation projects in the state budget would therefore be ...
[DOC File]1
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LO3 Record bonds issued at face value and at a discount or premium. Bondholders pay face value for bonds when the interest rate on the bonds approximates the market rate for similar investments. The issuing corporation records the bond issue at face value as a long-term liability in the Bonds …
[DOC File]Chapter 08 Intercompany Indebtedness
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36. On January 1, 2006, Nichols Corporation issued 10-year bonds at par to unrelated parties. The bonds pay interest of $15,000 every June 30 and December 31. On December 31, 2009, Harn Corporation purchased all of Nichols' bonds in the open market at a $6,000 discount. Harn is Nichols' 80 percent owned subsidiary.
[DOC File]CHAPTER 1
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When bonds are issued at a premium, the journal entry consists of a debit to Cash, a credit to Unamortized Bond Premium, and a credit to Bonds Payable. Unamortized Bond Premium is added to Bonds Payable on the balance sheet to produce the carrying value. The carrying value decreases as the premium is amortized and equals the face value of the ...
[DOCX File]Chapter 10
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Bonds usually are issued to obtain cash for long-term asset acquisitions (operational assets) and expansion of the entity. 2.A bond indenture is an agreement drawn up by a company planning to sell a bond issue. The indenture specifies the legal provisions of the bond issue such as maturity date, rate of interest, date of interest payments, and ...
[DOC File]Professor Paul Zarowin - NYU Stern School of Business
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When bonds are issued, if their coupon rate (annual cash interest par value of bond) does not equal their effective market rate, the bond will sell at a premium (above par, if coupon rate > effective market rate) or discount (below par, if coupon rate < effective market rate). The discount or premium is amortized over the life of the bond.
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