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Crane Company ed $70.000 of 9%20-year bonds on January 1 2000 a 30 intereste January 1 Crane Company uses t The actual of interest and the related amortization on December 21, 2020 Date Account Titles and Explanation 1/1/20 7/1/20 12/31/20 Prin Debit Date Account Titles and Explanation January 1 2000 713000 eTextbook and Media List of Accounts Credit On January 1, 2020, Culver Company sold 12% bonds having a maturity value of $400.000 for $430,326 which provides the bondholders with a 10% yield. The bonds are dated January 1, 2000 and mature January 1, 2005, with interest payable December 11 of each year. Culver Company allocates interest and unamortiond dacount or premium on the effective interest bas Prepare the journal entry at the date of the bond issuance Round anwer to decimal places g 38.548 no entry is required select "No Entry for the account sites and enter for the amounts Credit accounts are automatically indented when amounts entered Do not indent manually) Debit 7000 30860 Schedule of Interest Expense and Bond Premium Amortization Credit Prepare a schedule of interest expense and bond amortization for 2000-2022 Roundt decimal places 38.548)

Crane Company ed $70.000 of 9%20-year bonds on January 1 2000 a 30 intereste January 1 Crane Company uses t The actual of interest and the related amortization on December 21, 2020 Date Account Titles and Explanation 1/1/20 7/1/20 12/31/20 Prin Debit Date Account Titles and Explanation January 1 2000 713000 eTextbook and Media List of Accounts Credit On January 1, 2020, Culver Company sold 12% bonds having a maturity value of $400.000 for $430,326 which provides the bondholders with a 10% yield. The bonds are dated January 1, 2000 and mature January 1, 2005, with interest payable December 11 of each year. Culver Company allocates interest and unamortiond dacount or premium on the effective interest bas Prepare the journal entry at the date of the bond issuance Round anwer to decimal places g 38.548 no entry is required select "No Entry for the account sites and enter for the amounts Credit accounts are automatically indented when amounts entered Do not indent manually) Debit 7000 30860 Schedule of Interest Expense and Bond Premium Amortization Credit Prepare a schedule of interest expense and bond amortization for 2000-2022 Roundt decimal places 38.548)

FINANCIAL ACCOUNTING
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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### Educational Resource on Interest Expense and Bond Amortization #### Schedule of Interest Expense and Bond Premium Amortization for 2020–2022 **(Round answers to 0 decimal places, e.g., 38,548)** Below is a detailed schedule of interest expense and bond premium amortization. --- **Effective-Interest Method** **1. Schedule of Interest Expense and Bond Premium Amortization** | Date | Cash Paid | Interest Expense | Premium Amortized | Carrying Amount of Bonds | |------------|-----------|------------------|-------------------|--------------------------| | 1/1/20 | | | | | | 12/31/20 | | | | | | 12/31/21 | | | | | | 12/31/22 | | | | | --- #### Instructions for Schedule Preparation: 1. **Date:** Enter the relevant dates in the format MM/DD/YY. 2. **Cash Paid:** Record the actual cash paid for interest on the specified dates. 3. **Interest Expense:** Calculate the interest expense using the effective-interest method. 4. **Premium Amortized:** Determine and record the premium amortized for each period. 5. **Carrying Amount of Bonds:** Update the carrying amount of the bonds after accounting for the premium amortization. --- #### Preparation of Journal Entry for Interest Payment and Amortization for 2020 **(Round answer to 0 decimal places, e.g., 38,548; if no entry is required, select "No Entry" for the account titles and enter 0 for the amounts)** | Date | Account Titles and Explanation | Debit | Credit | |----------------|--------------------------------|--------|--------| | December 31, 2020 | | | | | | | | | | | | | | 1. **Date:** December 31, 2020 2. **Account Titles and Explanation:** Fill in the appropriate account titles and detailed explanations. 3. **Debit and Credit:** Input the respective debit and credit amounts for the journal entries. --- #### Preparation of Journal Entry for Interest Payment and Amortization for 2022 **(Round answer to 0 decimal places, e.g., 38,548; if no entry is required, select "No
Transcribed Image Text:### Educational Resource on Interest Expense and Bond Amortization #### Schedule of Interest Expense and Bond Premium Amortization for 2020–2022 **(Round answers to 0 decimal places, e.g., 38,548)** Below is a detailed schedule of interest expense and bond premium amortization. --- **Effective-Interest Method** **1. Schedule of Interest Expense and Bond Premium Amortization** | Date | Cash Paid | Interest Expense | Premium Amortized | Carrying Amount of Bonds | |------------|-----------|------------------|-------------------|--------------------------| | 1/1/20 | | | | | | 12/31/20 | | | | | | 12/31/21 | | | | | | 12/31/22 | | | | | --- #### Instructions for Schedule Preparation: 1. **Date:** Enter the relevant dates in the format MM/DD/YY. 2. **Cash Paid:** Record the actual cash paid for interest on the specified dates. 3. **Interest Expense:** Calculate the interest expense using the effective-interest method. 4. **Premium Amortized:** Determine and record the premium amortized for each period. 5. **Carrying Amount of Bonds:** Update the carrying amount of the bonds after accounting for the premium amortization. --- #### Preparation of Journal Entry for Interest Payment and Amortization for 2020 **(Round answer to 0 decimal places, e.g., 38,548; if no entry is required, select "No Entry" for the account titles and enter 0 for the amounts)** | Date | Account Titles and Explanation | Debit | Credit | |----------------|--------------------------------|--------|--------| | December 31, 2020 | | | | | | | | | | | | | | 1. **Date:** December 31, 2020 2. **Account Titles and Explanation:** Fill in the appropriate account titles and detailed explanations. 3. **Debit and Credit:** Input the respective debit and credit amounts for the journal entries. --- #### Preparation of Journal Entry for Interest Payment and Amortization for 2022 **(Round answer to 0 decimal places, e.g., 38,548; if no entry is required, select "No
**Journal Entries for Bond Issuance and Amortization** Crane Company issued $708,000 of 9%, 20-year bonds on January 1, 2020, at 101. Interest is payable semiannually on July 1 and January 1. Crane Company uses the straight-line method of amortization for bond premium or discount. **Journal entries include:** (a) The issuance of the bonds. (b) The payment of interest and the related amortization on July 1, 2020. (c) The accrual of interest and the related amortization on December 31, 2020. **Prepare the journal entries as follows:** > *Hint*: 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 the amount is entered. Do not indent manually. **Date: 1/1/2020** | Date | Account Titles and Explanation | Debit | Credit | |------------|-----------------------------------------|---------|----------| | 1/1/20 | Cash | 715080 | | | | Bonds Payable | | 708000 | | | Premium on Bonds Payable | | 7080 | **Date: 7/1/20** | Date | Account Titles and Explanation | Debit | Credit | |------------|-----------------------------------------|---------|----------| | 7/1/20 | Interest Expense | 31860 | | | | Premium on Bonds Payable | | 177 | | | Interest Payable | | 31737 | **Date: 12/31/20** | Date | Account Titles and Explanation | Debit | Credit | |------------|-----------------------------------------|---------|----------| | 12/31/20 | Interest Expense | 31860 | | | | Premium on Bonds Payable | | 177 | | | Interest Payable | | 31737 | --- On January 1, 2020, Culver Company sold 12% bonds having a maturity value of $400,000 for $420,926, which provides the bondholders with a 10% yield. The bonds are dated January 1, 202
Transcribed Image Text:**Journal Entries for Bond Issuance and Amortization** Crane Company issued $708,000 of 9%, 20-year bonds on January 1, 2020, at 101. Interest is payable semiannually on July 1 and January 1. Crane Company uses the straight-line method of amortization for bond premium or discount. **Journal entries include:** (a) The issuance of the bonds. (b) The payment of interest and the related amortization on July 1, 2020. (c) The accrual of interest and the related amortization on December 31, 2020. **Prepare the journal entries as follows:** > *Hint*: 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 the amount is entered. Do not indent manually. **Date: 1/1/2020** | Date | Account Titles and Explanation | Debit | Credit | |------------|-----------------------------------------|---------|----------| | 1/1/20 | Cash | 715080 | | | | Bonds Payable | | 708000 | | | Premium on Bonds Payable | | 7080 | **Date: 7/1/20** | Date | Account Titles and Explanation | Debit | Credit | |------------|-----------------------------------------|---------|----------| | 7/1/20 | Interest Expense | 31860 | | | | Premium on Bonds Payable | | 177 | | | Interest Payable | | 31737 | **Date: 12/31/20** | Date | Account Titles and Explanation | Debit | Credit | |------------|-----------------------------------------|---------|----------| | 12/31/20 | Interest Expense | 31860 | | | | Premium on Bonds Payable | | 177 | | | Interest Payable | | 31737 | --- On January 1, 2020, Culver Company sold 12% bonds having a maturity value of $400,000 for $420,926, which provides the bondholders with a 10% yield. The bonds are dated January 1, 202
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