Analyzing Bonds Payable and Debt Retirement The long-term liability disclosure note to the Year 2 annual report of Penguin Pilots Inc. included the following. December 31 ($ millions) Year 2 Year 1 6% Convertible senior debentures due Year 9 $185 $0 Additional assumptions: 1. Debentures were issued at par on January 1 in Year 2 and pay interest each December 31. 2. Debentures retired were scheduled to mature December 31, Year 9. 3. Assume instead that Alaska Air decides to retire the bonds at December 31 of Year 2, paying the fair value of the bonds, which reflected a yield rate of 5%. Required a. Prepare the December 31, Year 2, interest payment entry. • Note: Round your answers to the nearest million dollars. Date Dec. 31, Year 2 Interest Expense Bonds Payable To record interest payment Account Name Date Dec. 31, Year 2 Bonds Payable b. Prepare the December 31, Year bond retirement entry. • Note: Round your answers to the nearest million dollars. Account Name V Loss on Bond Retirement Cash To record bond retirement Dr. ($ millions) Cr. ($ millions) 11,100,000 0x 11,100,000 x Dr. ($ millions) Cr. ($ millions) 0x 0x 185.000.000 *

Bonds Payable Journal Entries; Issued at Par Plus Accrued Interest Richard, Inc., which closes its books on December 31, is authorized to issue $600,000 of six percent, 20‑year bonds dated March 1, with interest payments on September 1 and March 1.RequiredPrepare journal entries to record the following events, assuming that the bonds were sold at 100 plus accrued interest on July 1.a. The bond issuance.b. Payment of the semiannual interest on September 1.c. Accrual of bond interest expense at December 31.d. Payment of the semiannual interest on March 1 of the following year.e. Retirement of $200,000 of the bonds at 104 on March 1, Year 3 (immediately after the interest payment on that date).   General Journal Date Description Debit Credit a. Jul.1         Bonds Payable               Issuance of bonds plus accrued interest.     b. Sept.1 Bond Interest Payable                       To record semiannual interest payment.     c.…

Cornerstone Exercise 9-27 (Algorithmic)Debt Issued at a Discount (Straight Line) On January 1, 2020, Drew Company issued $1,250,000, 5-year bonds for $1,112,500. The stated rate of interest was 4% and interest is paid annually on December 31. Required: Prepare the amortization table for Drew Company's bonds. If an amount box does not require an entry, leave it blank and if the answer is zero, enter "0". Drew Company Amortization Table   Period Cash Payment (Credit) Interest Expense (Debit) Discount on Bonds Payable (Credit) Discount on Bonds Payable Balance Carrying Value At issue $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 $fill in the blank 4 $fill in the blank 5 12/31/20 fill in the blank 6 fill in the blank 7 fill in the blank 8 fill in the blank 9 fill in the blank 10 12/31/21 fill in the blank 11 fill in the blank 12 fill in the blank 13 fill in the blank 14 fill in the blank 15 12/31/22 fill in the blank 16 fill in the blank 17 fill in the…

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Premium Amortization On the first day of the fiscal year, a company issues a $5,100,000, 8%, 5-year bond that pays semiannual interest of $204,000 ($5,100,000 × 8% × ½), receiving cash of $5,312,072. Journalize the first interest payment and the amortization of the related bond premium Round to the nearest dollar If an amount box does not require an entry, leave it blank.

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Discount Amortization On the first day of the fiscal year, a company issues a $4,600,000, 7%, 6-year bond that pays semiannual interest of $161,000 ($4,600,000 x 7% x ), receiving cash $3,988,436. Journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Interest Expense Discount on Bonds Payable Cash 161,000

Premium Amortization On the first day of the fiscal year, a company issues a $3,500,000, 6%, 9-year bond that pays semiannual interest of $105,000 ($3,500,000 × 6% × ½), receiving cash of $4,322,808. Journalize the first interest payment and the amortization of the related bond premium. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.   Interest Expense        Premium on Bonds Payable        Cash

Entries for Issuing Bonds and Amortizing Premium by Straight-Line Method Daan Corporation wholesales repair products to equipment manufacturers. On April 1, 2016, Daan Corporation issued $2,100,000 of 6-year, 6% bonds at a market (effective) interest rate of 3%, receiving cash of $2,443,587. Interest is payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 1, 2016. For a compound transaction, if an amount box does not require an entry, leave it blank. b. Journalize the entry to record the first interest payment on October 1, 2016, and amortization of bond premium for six months, using the straight-line method. The bond premium amortization is combined with the semiannual interest payment. (Round to the nearest dollar.) For a compound transaction, if an amount box does not require an entry, leave it blank. c. Why was the company able to issue the bonds for $2,443,587 rather than for the face amount of $2,100,000? The market rate…