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Safari File Edit View History Bookmarks Window Help newconnect.mheducation.com Apple Disney ESPN Yahool gold-soul.la women's swi... shophearts Cloud Job Description Bing Chapter 14 Homework Ortega Inc. has a defined bene Exercise 14-10 Issuance of bonds; effective interest; amortization schedule (LO14-2) National Orthopedics Co issued 8% bonds. dated January 1 with a face amount of $900,000 on January 12018.The bonds mature on December 31, 2021 (4 years). For bonds of similar risk and maturity the market yield was 10% Interest is paid semiannually on June 30 and December 31 (Use appropriate factorls) from the tables provided.) Required: 1. Determine the price of the bonds at January 1,.2018. 2. Prepare the journal entry to record their issuance by National on January 1, 2018 e an amortization schedule that determines interest at the effective rate each period. 4. Prepare the journal entry to record interest on June 30, 2018 5. Prepare the appropriate journal entries at meturity on December 31 2021 Complete this question by entering your answers in the tabs below Required Required Required Required Required oetarmibi the price of the bonds at January 1.,2018. Reound finat answers to the neareat whole dollar.) are based sh Flow nterest Principal Amount Present Price of bonds Required 2 > C Prev sof 1o Next 26

Explanation / Answer

Req 1. n = 8 I =5% Cash flows Amount PV Interest 36000 232675.6 (36000*6.46321) Principal 900000 609156 (900000*0.67684) price of Bonds 841832 Cash Account Dr. 841832 Discount on bonds payable Dr. 58168     Bonds payable 900000 Date cash Interest Discount carrying Interest Expense Amotized Value 01.01.18 841832 30.06.18 36000 42091 6091 847923 31.12.18 36000 42396 6396 854319 30.06.19 36000 42716 6716 861035 31.12.19 36000 43052 7052 868087 30.06.20 36000 43404 7404 875491 31.12.20 36000 43775 7775 883266 30.06.21 36000 44163 8163 891429 31.12.21 36000 44571 8571 900000 June30 2018 Interest expense Account Dr. 42091      Cash account 36000      Discount on bonds payable 6091 Dec 31 2021 Bonds payable Dr. 900000      Cash account 900000

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