a. Prepare the journal entry to record the issuance of the bonds on January 1, 2018. Date Accounts Jan. 1, 2018 Debit Credit Before journalizing entries (b) and (c), prepare an amortization schedule for the bonds through the first two semi-annual interest periods. (Use a financial calculator to compute the semi-annual effective interest rate and round the semi-annual effective rate to four decimal places, X.XXXX%. Round all currency amounts to the nearest whole dollar.)
a. Prepare the journal entry to record the issuance of the bonds on January 1, 2018. Date Accounts Jan. 1, 2018 Debit Credit Before journalizing entries (b) and (c), prepare an amortization schedule for the bonds through the first two semi-annual interest periods. (Use a financial calculator to compute the semi-annual effective interest rate and round the semi-annual effective rate to four decimal places, X.XXXX%. Round all currency amounts to the nearest whole dollar.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:b. Prepare the journal entry to record the payment of interest and related amortization on July 1, 2018.
Date
Accounts
Debit
Jul. 1, 2018
Credit
c. Prepare the journal entry to record the accrual of interest and related amortization on December 31, 2018.
Date
Accounts
Debit
Credit
Dec. 31, 2018
Transcribed Image Text:Australian Horse Rides Ltd. issues $6,000,000 of six-year, 10% bonds dated January 1, 2018. Interest is payable on January 1 and July 1 each year. The proceeds realized from the issue were the $6,765,932
sales price less the $60,000 fee charged by Horse's lawyers. Horse's year-end is December 31.
Read the requirement.
a. Prepare the journal entry to record the issuance of the bonds on January 1, 2018.
Accounts
Debit
Date
Jan. 1, 2018
Before journalizing entries (b) and (c), prepare an amortization schedule for the bonds through the first two semi-annual interest periods. (Use a financial calculator to compute the semi-annual effective interest
rate and round the semi-annual effective rate to four decimal places, X.XXXX%. Round all currency amounts to the nearest whole dollar.)
Semi-annual
interest expense at
Date
2018 Jan. 1
2018 Jul. 1
2019 Jan. 1
%
Credit
Interest paid
Premium amortized
Amortized cost
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