ES PA10-6 (Algo) (Supplement 10A) Recording Bond Issue, Interest Payments (Straight-Line Amortization), and Early Bond Retirement [LO 10-S1] On January 1, 2021, Loop Raceway issued 630 bonds, each with a face value of $1,000, a stated interest rate of 5 percent paid annually on December 31, and a maturity date of December 31, 2023. On the issue date, the market interest rate was 6 percent, so the total proceeds from the bond issue were $613,148. Loop uses the straight-line bond amortization 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, 2021 and 2022, the interest and face value payment on December 31, 2023 and the bond retirement. Assume the bonds are retired early on January 1, 2023 instead of at their maturity date of 12/31/2023, record the entry to retire the bonds early assuming a price of 98. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 5 Prepare a bond amortization schedule. Changes During the Period Ending Bond Liability Balances Period Ended Cash Paid Discount Amortized Interest Expense Bonds Payable Discount on Bonds Payable Carrying Value $ 0 01/01/21 12/31/21 5 0 0 12/31/22 0 0 12/31/23 0 0 Req 4 Req 2 to 5 >
ES PA10-6 (Algo) (Supplement 10A) Recording Bond Issue, Interest Payments (Straight-Line Amortization), and Early Bond Retirement [LO 10-S1] On January 1, 2021, Loop Raceway issued 630 bonds, each with a face value of $1,000, a stated interest rate of 5 percent paid annually on December 31, and a maturity date of December 31, 2023. On the issue date, the market interest rate was 6 percent, so the total proceeds from the bond issue were $613,148. Loop uses the straight-line bond amortization 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, 2021 and 2022, the interest and face value payment on December 31, 2023 and the bond retirement. Assume the bonds are retired early on January 1, 2023 instead of at their maturity date of 12/31/2023, record the entry to retire the bonds early assuming a price of 98. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 5 Prepare a bond amortization schedule. Changes During the Period Ending Bond Liability Balances Period Ended Cash Paid Discount Amortized Interest Expense Bonds Payable Discount on Bonds Payable Carrying Value $ 0 01/01/21 12/31/21 5 0 0 12/31/22 0 0 12/31/23 0 0 Req 4 Req 2 to 5 >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![ES
PA10-6 (Algo) (Supplement 10A) Recording Bond Issue, Interest Payments (Straight-Line Amortization),
and Early Bond Retirement [LO 10-S1]
On January 1, 2021, Loop Raceway issued 630 bonds, each with a face value of $1,000, a stated interest rate of 5 percent paid
annually on December 31, and a maturity date of December 31, 2023. On the issue date, the market interest rate was 6 percent, so the
total proceeds from the bond issue were $613,148. Loop uses the straight-line bond amortization 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, 2021 and 2022, the interest and face
value payment on December 31, 2023 and the bond retirement. Assume the bonds are retired early on January 1, 2023 instead of
at their maturity date of 12/31/2023, record the entry to retire the bonds early assuming a price of 98.
Complete this question by entering your answers in the tabs below.
Req 1
Req 2 to 5
Prepare a bond amortization schedule.
Changes During the Period
Ending Bond Liability Balances
Period
Ended
Cash
Paid
Discount
Amortized
Interest
Expense
Bonds
Payable
Discount on
Bonds
Payable
Carrying
Value
$
0
01/01/21
12/31/21
5
0
0
12/31/22
0
0
12/31/23
0
0
Req 4
Req 2 to 5 >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffa51a4a1-47dc-4530-80a9-199e6acb2fc9%2F7f1cd5cf-889e-42f2-ac41-97e8b19caf13%2F3z624yg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:ES
PA10-6 (Algo) (Supplement 10A) Recording Bond Issue, Interest Payments (Straight-Line Amortization),
and Early Bond Retirement [LO 10-S1]
On January 1, 2021, Loop Raceway issued 630 bonds, each with a face value of $1,000, a stated interest rate of 5 percent paid
annually on December 31, and a maturity date of December 31, 2023. On the issue date, the market interest rate was 6 percent, so the
total proceeds from the bond issue were $613,148. Loop uses the straight-line bond amortization 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, 2021 and 2022, the interest and face
value payment on December 31, 2023 and the bond retirement. Assume the bonds are retired early on January 1, 2023 instead of
at their maturity date of 12/31/2023, record the entry to retire the bonds early assuming a price of 98.
Complete this question by entering your answers in the tabs below.
Req 1
Req 2 to 5
Prepare a bond amortization schedule.
Changes During the Period
Ending Bond Liability Balances
Period
Ended
Cash
Paid
Discount
Amortized
Interest
Expense
Bonds
Payable
Discount on
Bonds
Payable
Carrying
Value
$
0
01/01/21
12/31/21
5
0
0
12/31/22
0
0
12/31/23
0
0
Req 4
Req 2 to 5 >
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