Part AOn January 1, 2022, East Pacific Enterprises issued 9%, 10-year bonds with a face amount of$1,350,000 for cash $1,265,880. Interest is payable semiannually on June 30 and December 31.The bonds were issued for an effective interest rate of 10%.Required:a. Prepare an amortization table for the first 3 payment periods using the effective interestmethod in the following format (rounded to the nearest two decimal place):(4 marks)Semi-annual (A)InterestPeriod-end(B)(C)(D)(E)CashBondDiscountInterestInterestAmortization DiscountUnamortized CarryingAmountDatePaidExpenseb. Prepare the journal entry (without explanation) to record the issuance of the bonds onJanuary 1, 2022.(3 marks)c. Prepare the journal entry (without explanation) to record the third interest payment on June30, 2023.(3 marks)d. Describe four characteristics of the effective-interest method of accounting for bonds.(4 marks)

The objective of this question is to prepare an amortization table for the first three payment…

Answered: Part A On January 1, 2022, East Pacific…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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