apter 10 Excel Problem- Excel HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VEw C

Question

apter 10 Excel Problem- Excel HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VEw Calibri ?? Copy Format Painter I Conditional format as Cell Insert Delete Formatting Table Styles B 1 u-B-1s . A . n!ft+z g Merge & Center , $ .% , ., Number Cells Font On July 1, 2019, Witherspoon Satellites issued S4,500,000, 9%, 10-year bonds at S4,219,600. This price resulted in an effective-interest rate of 10% on the bonds. Witherspoon uses the effective interest method to amortize bond premium or discount. The bonds pay semiannual interest July 1 and Januray 1. Instructions (Round all computations to the nearest dollar.) 1(a) Prepare the journal entry to record the issuance of the bonds on July 1, 2019 2(b) Prepare an amortization table through December 31, 2020 (3 interest periods) for this bond issue. of the discount on December 31, 2019. of the discount on luly 1, 2020, assuming that interest was not accrued on June 30 4 (c) Prepare the journal entry to record the accrual of interest and the amortization (d) Prepare the journal entry to record the payment of interest and the amortization 6 18 (e) Prepare the journal entry to record the accrual of interest and the amortization of 19 the discount on December 31, 2020. o |NOTE: Enter either a number or a formula in the Yellow cells. 23 5 (a) 2019

Explanation / Answer

Effective interest rate 4.5% 5% Year Cash paid Interest expense Discount amortized Unamortized premium Carrying amount At issue 280400 4219600 31-12-2019 202500 210980 8480 271920 4228080 01-07-2020 202500 211404 8904 263016 4236984 31-12-2020 202500 211849 9349 253667 4246333 01-07-2019 Cash 4219600 Discount on bonds payable 280400                 Bonds payable 4500000 31-Dec-19 Interest expense 210980           Discount on bonds payable 8480           Interest payable 202500 01-07-2020 Interest expense 211404           Discount on bonds payable 8904            Cash 202500 31-Dec-20 Interest expense 211849           Discount on bonds payable 9349           Interest payable 202500

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