Issue of Bonds Payable_Discount_Premium

| August 13, 2017

Heathrow
issues $1,100,000 of 9%, 15-year bonds dated January 1, 2011, that pay interest
semiannually on June 30 and December 31. The bonds are issued at a price of
$950,524.

Required:
1.
Prepare
the January 1, 2011, journal entry to record the bonds’ issuance. (Omit the
“$” sign in your response.)

Date
General Journal Debit Credit
Jan. 1

2(a)
For
each semiannual period, compute the cash payment. (Omit the “$” sign
in your response.)

Cash
payment $

2(b)
For
each semiannual period, compute the the straight-line discount amortization.
(Round your answer to the nearest dollar amount. Omit the “$” sign in
your response.)

Amount
of discount amortization $

2(c)
For
each semiannual period, compute the bond interest expense. (Round your
intermediate calculations and final answer to the nearest dollar amount. Omit
the “$” sign in your response.)

Bond
interest expense $

3.
Determine
the total bond interest expense to be recognized over the bonds’ life. (Omit
the “$” sign in your response.)

Total
bond interest expense $

4.
Prepare
the first two years of an amortization table using the straight-line method.
(Round your intermediate calculations and final answers to the nearest dollar
amount. Omit the “$” sign in your response. Omit the “$”
sign in your response.)

Semiannual
Period-End Unamortized Discount Carrying
Value
1/01/2011
$ $
6/30/2011

12/31/2011

6/30/2012

12/31/2012

5.
Prepare
the journal entries to record the first two interest payments. (Round your
intermediate calculations and final answers to the nearest dollar amount. Omit
the “$” sign in your response.)

Date
General Journal Debit Credit
June
30

Dec.
31

Heathrow
issues $1,000,000 of 6%, 15-year bonds dated January 1, 2011, that pay interest
semiannually on June 30 and December 31. The bonds are issued at a price of
$1,223,995.

Required:
1.
Prepare
the January 1, 2011, journal entry to record the bonds’ issuance. (Omit the
“$” sign in your response.)

Date
General Journal Debit Credit
Jan. 1

2(a)
For
each semiannual period, compute the cash payment. (Omit the “$” sign
in your response.)

Cash
payment $

2(b)
For
each semiannual period, compute the the straight-line premium amortization.
(Round your answer to the nearest dollar amount. Omit the “$” sign in
your response.)

Amount
of premium amortized $

2(c)
For
each semiannual period, compute the the bond interest expense. (Omit the
“$” sign in your response.)

Bond
interest expense $

3.
Determine
the total bond interest expense to be recognized over the bonds’ life. (Omit
the “$” sign in your response.)

Total
bond interest expense $

4.
Prepare
the first two years of an amortization table using the straight-line method.
(Omit the “$” sign in your response.)

Semiannual
Period-End
Unamortized Premium Carrying
Value
1/01/2011
$ $
6/30/2011

12/31/2011

6/30/2012

12/31/2012

5.
Prepare
the journal entries to record the first two interest payments. (Omit the
“$” sign in your response.)

Date
General Journal Debit Credit
June
30

Dec.
31

Patton
issues $670,000 of 6.0%, four-year bonds dated January 1, 2011, that pay
interest semiannually on June 30 and December 31. They are issued at $624,896
and their market rate is 8% at the issue date.
references

10.value:
10.00
points

Problem
10-6A Part 1
1.
Prepare
the January 1, 2011, journal entry to record the bonds’ issuance. (Omit the
“$” sign in your response.)

Date
General Journal Debit Credit
Jan. 1

11.value:
10.00
points

Problem
10-6A Part 2
2.
Determine
the total bond interest expense to be recognized over the bonds’ life. (Omit
the “$” sign in your response.)

Total
bond interest expense $
check
my workeBook Links (2)references

12.value:
10.00
points

Problem
10-6A Part 3
3.
Prepare
a straight-line amortization table for the bonds’ first two years. (Make sure
that the unamortized discount is adjusted to “0” and the carrying
value equals to face value of the bond in the last period. Round your
intermediate calculations and final answers to the nearest dollar amount. Omit
the “$” sign in your response.)

Semiannual
Interest
Period-End Unamortized
Discount
Carrying
Value
1/01/2011
$ $
6/30/2011

12/31/2011

6/30/2012

12/31/2012

check
my workeBook Links (2)references

13.value:
10.00
points

Problem
10-6A Part 4
4.
Prepare
the journal entries to record the first two interest payments. (Round your
intermediate calculations and final answers to the nearest dollar amount. Omit
the “$” sign in your response.)

Date
General Journal Debit Credit
June
30

Dec.
31

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