please show all work. Thursday. Now. 16 (in class) instructions Protilem is to b
ID: 2572872 • Letter: P
Question
please show all work.
Thursday. Now. 16 (in class) instructions Protilem is to be worked independently All parts, excluding part 2, shouid be handwritten in penol and all work shown anat 2017. Mega Corporation issued 20 year, 5% bonds with a face value of January 1 and July 1 1.What is the issue price of the bonds? s_ were sold yield 6% interests payable semi-annualy on Show calculation or financial calculator inputs.) 2 Using EXCEL prepare an amortization table for the entire bond term. Table should be property labeled and neatly presented. Amounts should have commas and be rounded to the nearest dollar. Print and attach the table to this paper. HINT: For the Date Column, you can use the EDATE Function to easily add 6 months to your starting date and copy down to create labels for each row 3. Record the bond issuance on 1/1/17 Accounts Debit Credit 4. Assume the company prepares financial statements semi-annually on June 30 and December 31. Prepare the appropriate adjusting entries for June 30, 2017 and December 31,2017 for interest and for amortization of the discount or premium. Use effective method amortization 6/30/17 Accounts Debit Credit 1 of 1Explanation / Answer
Half year interest payment = $1,925,000 x 2.5%
...........................................= $48,125
1. Issue price of bonds = [Interest Payment x PVAF(3%, 40 period)] + [Bond Face Value x PVIF(3%, 40 period)]
.....................................= [$48,125 x 23.1148] + [$1,925,000 x 0.3066]
.....................................= $1,112,400 + $590,205
.....................................= $1,702,605
2. Amortization Table
3. Journal entry for Bond issuance
Cash Account Debit $1,702,605
Discount on Bonds Payable Account Debit $222,395
Bonds Payable Account Credit $1,925,000
(To record issuance of bonds)
4.
5. Liabilities
Long Term liabilities $1,925,000
Date Balance Interest@3% Cash Paid Discount Amortized Discount Unamortized Balance 1/1/2017 $1,702,605 $222,395 1/7/2017 $1,705,558 $51,078 $48,125 $2,953 $219,442 1/1/2018 $1,708,600 $51,167 $48,125 $3,042 $216,400 1/7/2018 $1,711,733 $51,258 $48,125 $3,133 $213,267 1/1/2019 $1,714,960 $51,352 $48,125 $3,227 $210,040 1/7/2019 $1,718,284 $51,449 $48,125 $3,324 $206,716 1/1/2020 $1,721,707 $51,549 $48,125 $3,424 $203,293 1/7/2020 $1,725,233 $51,651 $48,125 $3,526 $199,767 1/1/2021 $1,728,865 $51,757 $48,125 $3,632 $196,135 1/7/2021 $1,732,606 $51,866 $48,125 $3,741 $192,394 1/1/2022 $1,736,460 $51,978 $48,125 $3,853 $188,540 1/7/2022 $1,740,428 $52,094 $48,125 $3,969 $184,572 1/1/2023 $1,744,516 $52,213 $48,125 $4,088 $180,484 1/7/2023 $1,748,727 $52,335 $48,125 $4,210 $176,273 1/1/2024 $1,753,063 $52,462 $48,125 $4,337 $171,937 1/7/2024 $1,757,530 $52,592 $48,125 $4,467 $167,470 1/1/2025 $1,762,131 $52,726 $48,125 $4,601 $162,869 1/7/2025 $1,766,870 $52,864 $48,125 $4,739 $158,130 1/1/2026 $1,771,751 $53,006 $48,125 $4,881 $153,249 1/7/2026 $1,776,779 $53,153 $48,125 $5,028 $148,221 1/1/2027 $1,781,957 $53,303 $48,125 $5,178 $143,043 1/7/2027 $1,787,291 $53,459 $48,125 $5,334 $137,709 1/1/2028 $1,792,785 $53,619 $48,125 $5,494 $132,215 1/7/2028 $1,798,443 $53,784 $48,125 $5,659 $126,557 1/1/2029 $1,804,272 $53,953 $48,125 $5,828 $120,728 1/7/2029 $1,810,275 $54,128 $48,125 $6,003 $114,725 1/1/2030 $1,816,458 $54,308 $48,125 $6,183 $108,542 1/7/2030 $1,822,827 $54,494 $48,125 $6,369 $102,173 1/1/2031 $1,829,386 $54,685 $48,125 $6,560 $95,614 1/7/2031 $1,836,143 $54,882 $48,125 $6,757 $88,857 1/1/2032 $1,843,102 $55,084 $48,125 $6,959 $81,898 1/7/2032 $1,850,270 $55,293 $48,125 $7,168 $74,730 1/1/2033 $1,857,654 $55,508 $48,125 $7,383 $67,346 1/7/2033 $1,865,258 $55,730 $48,125 $7,605 $59,742 1/1/2034 $1,873,091 $55,958 $48,125 $7,833 $51,909 1/7/2034 $1,881,159 $56,193 $48,125 $8,068 $43,841 1/1/2035 $1,889,468 $56,435 $48,125 $8,310 $35,532 1/7/2035 $1,898,027 $56,684 $48,125 $8,559 $26,973 1/1/2036 $1,906,843 $56,941 $48,125 $8,816 $18,157 1/7/2036 $1,915,924 $57,205 $48,125 $9,080 $9,076 1/7/2037 $1,925,000 $57,201 $48,125 $9,076 $0Related Questions
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