E10-14 (Static) (Chapter Supplement) Recording and Reporting a Bond Issued at a Premium (without Premium Account) LO10-5 Park Corporation is planning to issue bonds with a face value of $2,000,000 and a coupon rate of 10 percent. The bonds mature in 10 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Park uses the effective-interest amortization method and does not use a premium account. Assume an annual market rate of interest of 8.5 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) Required: 1.&2. Prepare the journal entry to record the issuance of the bonds and the interest payment on June 30 of this year. 3. What bonds payable amount will Park report on its June 30 balance sheet? Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Prepare the journal entry to record the issuance of the bonds and the interest payment on June 30 of this year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 Date January 01 General Journal Cash Bonds payable Premium on bonds payable 2 June 30 Interest expense Premium on bonds payable Cash Req 1 and 2 Req 3 > Debit 2,199,415 Credit 2,000,000 199,415 93,475 6,525 100,000
E10-14 (Static) (Chapter Supplement) Recording and Reporting a Bond Issued at a Premium (without Premium Account) LO10-5 Park Corporation is planning to issue bonds with a face value of $2,000,000 and a coupon rate of 10 percent. The bonds mature in 10 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Park uses the effective-interest amortization method and does not use a premium account. Assume an annual market rate of interest of 8.5 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) Required: 1.&2. Prepare the journal entry to record the issuance of the bonds and the interest payment on June 30 of this year. 3. What bonds payable amount will Park report on its June 30 balance sheet? Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Prepare the journal entry to record the issuance of the bonds and the interest payment on June 30 of this year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 Date January 01 General Journal Cash Bonds payable Premium on bonds payable 2 June 30 Interest expense Premium on bonds payable Cash Req 1 and 2 Req 3 > Debit 2,199,415 Credit 2,000,000 199,415 93,475 6,525 100,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:E10-14 (Static) (Chapter Supplement) Recording and Reporting a Bond Issued at a Premium (without
Premium Account) LO10-5
Park Corporation is planning to issue bonds with a face value of $2,000,000 and a coupon rate of 10 percent. The bonds mature in 10
years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Park uses
the effective-interest amortization method and does not use a premium account. Assume an annual market rate of interest of 8.5
percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)
Required:
1.&2. Prepare the journal entry to record the issuance of the bonds and the interest payment on June 30 of this year.
3. What bonds payable amount will Park report on its June 30 balance sheet?
> Answer is not complete.
Complete this question by entering your answers in the tabs below.
Req 1 and 2
Req 3
Prepare the journal entry to record the issuance of the bonds and the interest payment on June 30 of this year. (If no entry is
required for a transaction/event, select "No journal entry required" in the first account field.)
No
1
Date
January 01
General Journal
Cash
Bonds payable
Premium on bonds payable
2
June 30
Interest expense
Premium on bonds payable
Cash
< Req 1 and 2
Req 3
>
Debit
Credit
✓ 2,199,415
✓
2,000,000 x
199,415x
93,475
×
6,525
100,000
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