Hillis Corporation issued $600,000 of 13% bonds on January 1, 2019, for $614,752.24. The bonds are due December 31, 2021, were issued to yield 12%, and pay interest semiannually on June 30 and December 31. Hillis uses the effective interest method.Required:1.Prepare a bond interest expense and premium amortization schedule.2.Assume the company retired the bonds on September 30, 2021, for $630,000, which includes accrued interest. Prepare the journal entry to record the bond retirement.

A journal entry is a form of accounting entry that is used to report a business transaction in a…

Answered: Hillis Corporation issued $600,000 of…

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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Hillis Corporation issued $600,000 of 13% bonds on January 1, 2019, for $614,752.24. The bonds are due December 31, 2021, were issued to yield 12%, and pay interest semiannually on June 30 and December 31. Hillis uses the effective interest method.

Required:

1.	Prepare a bond interest expense and premium amortization schedule.
2.	Assume the company retired the bonds on September 30, 2021, for $630,000, which includes accrued interest. Prepare the journal entry to record the bond retirement.

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On the bottom of part 1, the interest expense, premium amortization, and book value of bond are incorrect. Could you check over your calculations and see what you have done wrong?

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