14.3 i: CengageNOWy2] Onl × | e Chegg Study | Guided Sol b Homework Help-Q&A; fr

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14.3

i: CengageNOWy2] Onl × | e Chegg Study | Guided Sol b Homework Help-Q&A; fr a Samsung Galaxy S9 Plus V + .. . Cengage O v2 cengageno con ilm takeAss gnment take ssignmentain doinvoker-assignments takeAssignmentsess on ocator-assignment t Ch 14-3 Exercises and Problems eBook Show Me How Calculator Print item 1. EX.14-05.BLANKSHEET AL.. Entries for Issulng Bonds and Amortizlng DIscount by Stralght-LIne Method On the first day of its fiscal year, Chin Company issued $16,200,000 of five-year, 11% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 12%, resulting in Chin Company receiving cash of $15,603,758. 2. EX.14-06.ALGO 3. EX.14-07.ALGO a. Joumalize the entries to record the following: 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest 4. EX. 14-08,BLANKSHEETAL… 5. EX.14-09.ALGO payment. (Round your answer to the nearest dollar.) 3. Second semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual 6. EX.14-12.ALGO Interest payment. (Round your answer to the nearest dollar.) For a compound transaction, if an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar 7. EX. 14-14.ALGO 1. 2. 3. Check My Work 2 more Check My Work uses remaining Previous Next Progress: 2/7 items Assignment Score: 0.0% All work saved. Email Instructor Save and Exit Submit Assignment for Grading 9:05 PM Type here to search /19/2018 2

Explanation / Answer

a.

b.

Bond interest expense for the year = $1,901,248

c.  

The market rate of interest is higher than the cotracst rate of interest.

1. To record isue of bonds Date Account Title Debit Credit 1/1/Y1 Cash 15603758 Discount on bond issue 596242 Bonds Payable 16200000 2. To record first semi-annual interest Date Account Title Debit Credit 6/30/Y1 Interest Expense 950624 Discount on bond issue 59624 Cash 891000 3. To record second semi-annual interest Date Account Title Debit Credit 12/31/Y1 Interest Expense 950624 Discount on bond issue 59624 Cash 891000

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