Period01/01/18-12/31/1801/01/19-12/31/1901/01/20-12/31/20Beginning ofYearBondsPayable, NetInterestExpenseChanges During the PeriodCash PaidIncrease in BondsPayable, Net$000End of YearBondsPayable, Net$000 On January 1, 2018, Surreal Manufacturing issued 600 bonds, each with a face value of $1,000, a stated interest rate of 3percent paid annually on December 31, and a maturity date of December 31, 2020. On the issue date, the market interest ratewas 4 percent, so the total proceeds from the bond issue were $583,352. Surreal uses the simplified effective-interest bondamortization method and adjusts for any rounding errors when recording interest in the final year.Required:1. Prepare a bond amortization schedule.2-5. Prepare the journal entries to record the bond issue, the interest payments on December 31, 2018 and 2019, the interestand face value payment on December 31, 2020 and the bond retirement. Assume the bonds are retired on January 1,2020, at a price of 101.

1. Prepare a bond amortization schedule. 2-5. Prepare the journal entries to record the bond issue, the interest payments on December 31, 2018 and 2019, the interest and face value payment on December 31, 2020 and the bond retirement. Assume the bonds are retired on January 1, 2020, at a price of 101.

1. Prepare a bond amortization schedule. 2-5. Prepare the journal entries to record the bond issue, the interest payments on December 31, 2018 and 2019, the interest and face value payment on December 31, 2020 and the bond retirement. Assume the bonds are retired on January 1, 2020, at a price of 101.

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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