It's that time again, I got my Accounting Final tommarow neone ne good at accounting?

Jiffy Corporation issued ten-year term bonds on January 1, 20x2, with a face value of $800,000. The face interest rate is 6 percent and interest is payable semiannually on June 30 and December 31. The bonds were issued for $690,960 to yield an effective annual rate of 8 percent. The effective interest method of amortization is used.


19. The journal entry on June 30, 20x2, to record the payment of interest and amortization of discount will include a:

(a) debit to Bond Interest Expense for $24,000.
(b) credit to Cash for $27,638.
(c) credit to Bond Discount for $3,638.
(d) debit to Bond Interest Expense for $32,000.


20. The journal entry to be recorded on December 31, 20x2, for the payment of interest and the amortization of discount will include a:
(a) debit to Bond Interest Expense for $24,000.
(b) credit to Cash for $27,784.
(c) credit to Bond Discount for $3,638.
(d) credit to Bond Discount for $3,784.

I know the answers to these questions but I have no idea why, when I do the problem I get a completely different answer everytime...

 

LoL nvm I called one of my friends and got it, but if neone else is takin accounting and wants the answer i'll leave this up here...or if i gotta post more questions...

DAMNIT I HATE EXAMS!....

 

I was a business major, accounting sucks. You can work 3-4 hrs on one problem and make a tiny error that throws the whole thing off.

 

Ummmmmmmmmmm, yeah i'll pass! I'm at wory pretty busy, i'll try it tonite...Prolly won't have a clue though!

 

i'm a finance major.. we do those same questions in my finance classes

 

yeah the final two chapters in the book are all Bonds, and financing stuff, I got the hang of it for the most part, our exam is about 50% math related problems and 50% conceptual... it's not enough to know how to do a problem, u also gotta understand why and how, and all the other BS along with it...

F'n A Cotton F'n A...

 

By the way the answer for the first one is C, and D for the second one... here's what I ****ed up... when I divided the interest expense and Interest payable for time I divided by 6 instead of 2 for some reason... Grimmz = Idiot!... GOSH!...

so yea...

Interest Expense = Carrying Value X Market Rate X Time

Interest Payable = Issued Price X Bond % X Time

the difference in the two is the discount...hence the 3638, then you add that to the carrying value to reduce the liability and then do the whole thing over again and that gets you the new discount for the second payment of 3,784

not that neone cared, but if you did...

 

hey wanna do my finance homework and my accounting paper while you're at it?!?

 

No clue as Im an engineering major, but I must join you and say that EXAMS DO SUCK DONKEY *****. 4 more days...4 more days. Its funny though, it doesnt make me feel any better that I only have 4 more days, as I have exams the whole time, which are all HARD AS *****!

 

damn... i dont finish till may 15...

 

i'm done Fri.! GIGGITY! 4 months of SUMMER!...