Answered: (A) Bridgeport Co. sells $534,000 of 8%…

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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(A) Bridgeport Co. sells $534,000 of 8% bonds on March 1, 2020. The bonds pay interest on September 1 and March 1. The due date of the bonds is September 1, 2023. The bonds yield 12%. Give entries through December 31, 2021.

Prepare a bond amortization schedule using the effective-interest method for discount and premium amortization. Amortize premium or discount on interest dates and at year-end. (Round answers to 0 decimal places, e.g. 38,548.)

(B) Prepare all of the relevant journal entries from the time of sale until December 31, 2021. (Assume that no reversing entries were made.) (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Prepare all of the relevant journal entries from the time of sale until December 31, 2021. (Assume that no reversing entries
were made.) (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places e.g.
58,971. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are
automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
3/1/20
3/1/21

Bridgeport Co. sells $534,000 of 8% bonds on March 1, 2020. The bonds pay interest on September 1 and March 1. The due
date of the bonds is September 1, 2023. The bonds yield 12%. Give entries through December 31, 2021.
Prepare a bond amortization schedule using the effective-interest method for discount and premium amortization. Amortize
premium or discount on interest dates and at year-end. (Round answers to 0 decimal places, e.g. 38,548.)
Schedule of Bond Discount Amortization
Effective-Interest Method
Bonds Sold to Yield
Carryir
Cash
Interest
Discount
Amount
Date
Paid
Expense
Amortized
Bonds
3/1/20
$
$
9/1/20
3/1/21
9/1/21
3/1/22
9/1/22
3/1/23
9/1/23
%24
%24
%24
%24

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