Exercise 14-10 On January 1, 2017, Shamrock Company sold 12% bonds havin a matur

Question

Exercise 14-10 On January 1, 2017, Shamrock Company sold 12% bonds havin a maturity value o s360,000 to?87,293 hich provides the bondholders with a 10% Y eld. The bonds are dated January ? year, 5hamrock Company allocates interest and unamortized discount or premium on the effective-Interest basis 017 and matureJanuary 1 20 2 with interest payable Decem be 31 o each Prepare the ouma antr f at the date a the bond issuance when amount is entered. Do not indent manually.) Round nsvor to 0 decemai places, e q 38,548. If no entry 1s require sc ect No Entry"for the account titles and enter 0 or the amounts. Credit account titles arc automatically indentod o not indent Date At Titles and Explanation Credit anuary 1, 2017 Cash Premium on Bonds Payable Bunds Payable 50300 Prepare a schedule of interest expense and bond amortization for 2017-2019. (Round asiver to 0 decimal places, e.. 3 38,548 Schedule ot Interest Expense and Bond Premium Amortization Effective-Interest Method Date Paid Amortized Amount of Bonds

Explanation / Answer

a) Date Accounts Titles & Explanations Debit Credit Jan 1, 2017 Cash $387,293.00 Premium on Bonds Payable $27,293.00 Bonds Payable $360,000.00 b) Schedule of Interest Expense and Bonds Amortization Date Cash Paid = $360,000 x 12% Interest Expense = 10% of Previous Carrying Amt Premium amortized= Cash paid - Interest Carrying Amount of Bonds = Previous Bal. - Premium Amortized Jan 1, 2017 $387,293.00 Dec 31,2017 $43,200.00 $38,729.30 $4,470.70 $382,822.30 Dec 31,2018 $43,200.00 $38,282.23 $4,917.77 $377,904.53 Dec 31,2019 $43,200.00 $37,790.45 $5,409.55 $372,494.98 Dec 31,2020 $43,200.00 $37,249.50 $5,950.50 $366,544.48 Dec 31,2021 $43,200.00 $36,654.45 $6,544.48 $360,000.00 c) Date Accounts Titles & Explanations Debit Credit Dec 31,2017 Interest Expense $38,729.30 Premium Amortization $4,470.70 Interest Payable $43,200.00 d) Date Accounts Titles & Explanations Debit Credit Dec 31,2019 Interest Expense $37,790.45 Premium Amortization $5,409.55 Interest Payable $43,200.00

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.