Hillside issues $3,000,000 of 6%, 15-year bonds dated January 1, 2017, that pay

Question

Hillside issues $3,000,000 of 6%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31 The bonds are issued at a price of $3,671,990. Required: 1. Prepare the January 1, 2017, journal entry to record the bonds' issuance 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line premium amortization. 2(c) For each semiannual period, complete the table below to calculate the bond interest expense 3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life 4. Prepare the first two years of an amortization table using the straight-line method 5. Prepare the journal entries to record the first two interest payments Complete this question by entering your answers in the tabs below. Req 2A to 2C Req 3 Req 4 Req 5 Req 1 Prepare the first two years of an amortization table using the straight-line method Semiannual Period- Unamortized Carrying Value End 01/01/2017 06/30/2017 12/31/2017 06/30/2018 12/31/2018 Premium $671,990 649,590 627,190

Explanation / Answer

4 Semiannual Period-End Unamortized Premium Carrying Value 1/1/2015 $671,990 $3,671,990 6/30/2015 649,590 3,649,590 12/31/2015 627,190 3,627,190 6/30/2016 604,790 3,604,790 12/31/2016 582,390 3,582,390 5 Date General Journal Debit Credit 30-Jun-15 Bond interest expense 67,600 Premium on bonds payable 22400 Cash 90,000 31-Dec-15 Bond interest expense 67,600 Premium on bonds payable 22400 Cash 90,000

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