Exercise 10-22 Culver Corporation issued $440,000, 696, 20-year bonds on January
ID: 2577119 • Letter: E
Question
Exercise 10-22 Culver Corporation issued $440,000, 696, 20-year bonds on January 1, 2017, for $353,600. This price resulted in an effective-interest rate of 8% on the bonds. Interest is payable annually on January 1. Culver uses the effective-interest method to amortize bond premium or discount. Prepare the schedule using effective-interest method to amortize bond premium or discount of Culver Corporation. (Round answers to 0 decimal places, e.g. 5,250.) Interest Periods Interest to Be Paid Interest Expense to Be Recorded Discount Amortization Unamortized Discount Bond Carrying Value Issue date Prepare the journal entry to record the issuance of the bonds. (Round answers 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 Explanation Debit Credit Jan. 1, 2017Explanation / Answer
interest interest to interest Discount unamorti bond periods be paid expense amortization discount CV 6% 8% issue date 86,400 353,600 1 26400 28288 1888 84,512 355,488 2 26400 28439 2039 82473 357527 Journal entry Date Account titles & Explanations Debit Credit 1/1/2017 Cash 353,600 discount on bonds payable 86,400 bonds payable 440,000 12/31/2017 interest expense 28288 discount on bonds payable 1888 interest payable 26,400 1/1/2018 interest payable 26,400 cash 26,400
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