FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:Hillside issues $4,000,000 of 6%, 15-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and
December 31.
The bonds are issued at a price of $3,456,448.
Required:
1. Prepare the January 1 journal entry to record the bonds' issuance.
2(a) For each semiannual period, complete the table below to calculate the cash payment.
2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization.
2(c) For each semiannual period, complete the table below to calculate the bond interest expense.
3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.
4. Prepare the first two years of a straight-line amortization table.
5. Prepare the journal entries to record the first two interest payments.
Complete this question by entering your answers in the tabs below.
Req 1
Req 2A to 2C
Req 3
Req 4
Req 5
Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.
Total bond interest expense over life of bonds:
Amount repaid:
30 payments of
$
138,118 $ 4,143,540
Par value at maturity
Total repaid
4,143,540
Less amount borrowed
Total bond interest expense
$ 4,143,540
< Req 2A to 2C
Req 4 >
"Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.
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