Cheyenne Corp. ssued $370,00 6% 20-year bonds on January 1 2017, for SJJ 2. This

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Cheyenne Corp. ssued $370,00 6% 20-year bonds on January 1 2017, for SJJ 2. This pr ce resulted in an effect e terest rate of 7% on the bonds. Interest s payable annually on January 1 Cheyenne uses the effective nterest method to amor ze bond premium or dscount. Prepare the schedule using effective-interest method to amortize bond premium or discount of Cheyenne Corp., (Round answers to 0 decmna, places, e.g. 5,250.) Interest Expense Discount Unamortized Amortization Discount Carrying Value Bond Interest nterest to Periods Ue Paid _to Be Recorded soue date Prepare the jounal entry to record the issuance of the bonds. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automaticalily Indented when amount is entered. Do not Indent manualy.) Date Account Titles and Explanation Jan, 1, 2017 Debit Credit Prepsre the journal entry to record the accrual of interest and the discount amortization on December 31, 2017. (Round answrers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Lxplanation Debit Credrt Dec. 31, 2017 Prepare the jounal entry to record the payment of interest on anuary 1, 2018. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically Indented when amount is entered. Do nat Indent manually.) Date Account Titles and Explanation Jan. 1, 2018 Debit Credit

Explanation / Answer

Interest periods

Interest to be paid

Interest expense to be recorded

Discount Amortization

Unamortized discount

Bond Carrying value

1

(370000 x 0.06)

(330802 x 0.08)

39198

330802

2

22200

23156.14

956.14

38241.86

331758.14

Date

General Journal

Debit

Credit

01/01/2017

Cash

330802

Discount on bonds payable

39198

Bonds payable

370000

12/31/2017

Interest Expense

23156.14

Interest payable

22200

Discount on bonds payable

956.14

01/01/2018

Interest payable

22200

Cash

22200

Interest periods

Interest to be paid

Interest expense to be recorded

Discount Amortization

Unamortized discount

Bond Carrying value

1

(370000 x 0.06)

(330802 x 0.08)

39198

330802

2

22200

23156.14

956.14

38241.86

331758.14

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