Headland Co. sells $497,000 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 Date   Cash Paid   Interest Expense   Discount Amortized   Carrying Amount of 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

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Headland Co. sells $497,000 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


Date
 

Cash
Paid
 

Interest
Expense
 

Discount
Amortized
 
Carrying
Amount of
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  
 
 
 
 
 
 
 

 

 

PLEASE, see the images attached for the 2nd part of this problem.

**Journal Entries from Sale to December 31, 2021**

This section is designed to prepare all relevant journal entries from the time of sale until December 31, 2021. No reversing entries are assumed to have been made. Present value factor calculations should be rounded to 5 decimal places, while final answers should be rounded to 0 decimal places.

**Journal Entry Details:**

- **March 1, 2020**
  - **Debit**:
    - Cash: $448,122
    - Discount on Notes Payable: $48,878
  - **Credit**:
    - Bonds Payable: $497,000

- **September 1, 2020**
  - **Debit**:
    - Interest Expense: $26,887
  - **Credit**:
    - Cash: $19,880
    - Discount on Bonds Payable: $7,007

- **March 1, 2021**
  - **Debit**:
    - Interest Expense: $27,308
  - **Credit**:
    - Cash: $19,880
    - Discount on Bonds Payable: $7,428

- **March 1, 2021 (subsequent entry)**
  - **Debit**:
    - Interest Payable: $27,308
  - **Credit**:
    - Cash: $19,880

Each debit and credit is crucial to maintain the balance in the accounts, reflecting accurate financial activity over the specified period.
Transcribed Image Text:**Journal Entries from Sale to December 31, 2021** This section is designed to prepare all relevant journal entries from the time of sale until December 31, 2021. No reversing entries are assumed to have been made. Present value factor calculations should be rounded to 5 decimal places, while final answers should be rounded to 0 decimal places. **Journal Entry Details:** - **March 1, 2020** - **Debit**: - Cash: $448,122 - Discount on Notes Payable: $48,878 - **Credit**: - Bonds Payable: $497,000 - **September 1, 2020** - **Debit**: - Interest Expense: $26,887 - **Credit**: - Cash: $19,880 - Discount on Bonds Payable: $7,007 - **March 1, 2021** - **Debit**: - Interest Expense: $27,308 - **Credit**: - Cash: $19,880 - Discount on Bonds Payable: $7,428 - **March 1, 2021 (subsequent entry)** - **Debit**: - Interest Payable: $27,308 - **Credit**: - Cash: $19,880 Each debit and credit is crucial to maintain the balance in the accounts, reflecting accurate financial activity over the specified period.
The image depicts a section from an accounting or finance educational tool showing journal entry fields. It includes fields to record dates, accounts, and their respective amounts. 

Here's a transcription of the visible entries:

Date: 3/1/21  
- Credit: Interest Payable, Amount: 27,308

- Debit: Cash, Amount: 19,880

- Debit: Discount on Bonds Payable, Amount: 7,428

There are additional empty fields for entries with no specific details filled in. 

The image suggests users can interact with the tool by showing their work or calculations via a link labeled "Open Show Work."
Transcribed Image Text:The image depicts a section from an accounting or finance educational tool showing journal entry fields. It includes fields to record dates, accounts, and their respective amounts. Here's a transcription of the visible entries: Date: 3/1/21 - Credit: Interest Payable, Amount: 27,308 - Debit: Cash, Amount: 19,880 - Debit: Discount on Bonds Payable, Amount: 7,428 There are additional empty fields for entries with no specific details filled in. The image suggests users can interact with the tool by showing their work or calculations via a link labeled "Open Show Work."
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