Please show ALL work! Thank you! Required information Problem 10-SA Straight-Lin

Question

Please show ALL work! Thank you!

Required information Problem 10-SA Straight-Line: Amortization of bond premium and discount LO P1, P2, P3 The following information applies to the questions displayed below Legacy issues $720,000 of 6.5%, four-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31, They are issued at $683.649 and their market rate is 8% at the issue date. Problem 10-5A Part 1 Required: 1. Prepare the January 1, 2017, journal entry to record the bonds' issuance. Date Credit /Jan 01, 2017 Cash Discount on bonds payable 83 649 6,351 Bonds payable 720 Required information Problem 10-5A Straight-Line: Amortization of bond premium and discount LO P1, P2, P The following information applies to the questions displayed below Legacy issues $720,000 of 6.5%, four-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31, They are issued at $683,649 and their market rate is 8% at the issue date. Problem 10-5A Part 2 2. Determine the total bond interest expense to be recognized over the bonds life. bond interest expense over life of Amount repaid payments of Par value at maturity Total repaid Less amount borrowed bond interest expense Required information Problem 10-5A Straight-Line: Amortization of bond premium and discount LO P1, P2, P3 [The following information applies to the questions displayed below Legacy issues $720,000 of 6.5%, four-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31, They are issued at $683,649 and their market rate is 8% at the issue date. Problem 10-5A Part 3 3. Prepare a straight-line amortization table for the bonds' first two years Carrying 01/01/2017 06/30/2017 12/31/2017 06/30/2018 12/31/2018

Explanation / Answer

No Date General Journal Debit Credit 1 1/1/2017 Cash 683,649 discount on bonds payable 36,351 Bonds payable 720,000 2) total bond interest expense over life of bonds Amount repaid: 8 payments of 23,400 187200 par value at maturity 720,000 total repaid 907200 less amount borrowed -683,649 total bond interest expense. 223551 3) Straight line amortization 36,351/8 4544 period unamortized Carrying discount value 1/1/2017 36,351 683,649 6/30/2017 31807 688,193 12/31/2017 27263 692,737 6/30/2018 22719 697,281 12/31/2018 18,715 701,825 4) Date General Journal Debit Credit 6/30/2017 interest expense 27,944 discount on bonds payable 4,544 cash 23,400 12/31/2017 interest expense 27,944 discount on bonds payable 4,544 cash 23,400

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.