Hillside issues $1,400,000 of 5%, 15-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31. Problem 14-2A (Algo) Straight-Line: Amortization of bond premium LO P3 The bonds are issued at a price of $1,713,594. Required: 1. Prepare the January 1 journal entry to record the bonds’ issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line premium amortization. 2(c) For each semiannual period, complete the table below to calculate the bond interest expense. 3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 4. Prepare the first two years of a straight-line amortization table. 5. Prepare the journal entries to record the first two interest payments.
Hillside issues $1,400,000 of 5%, 15-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31. Problem 14-2A (Algo) Straight-Line: Amortization of bond premium LO P3 The bonds are issued at a price of $1,713,594. Required: 1. Prepare the January 1 journal entry to record the bonds’ issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line premium amortization. 2(c) For each semiannual period, complete the table below to calculate the bond interest expense. 3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 4. Prepare the first two years of a straight-line amortization table. 5. Prepare the journal entries to record the first two interest payments.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Hillside issues $1,400,000 of 5%, 15-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31.
Problem 14-2A (Algo) Straight-Line: Amortization of bond premium LO P3
The bonds are issued at a price of $1,713,594.
Required:
1. Prepare the January 1
2(a) For each semiannual period, complete the table below to calculate the cash payment.
2(b) For each semiannual period, complete the table below to calculate the straight-line premium amortization.
2(c) For each semiannual period, complete the table below to calculate the bond interest expense.
3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.
4. Prepare the first two years of a straight-line amortization table.
5. Prepare the journal entries to record the first two interest payments.
Transcribed Image Text:Prepare the journal entries to record the first two interest payments. (Round your intermediate and final answers to the nearest whole
dollar.)
View transaction list
Journal entry worksheet
1
2
Record the second interest payment on December 31.
Note: Enter debits before credits.
Date
December 31
Record entry
General Journal
Clear entry
Debit
Credit
View general journal
Transcribed Image Text:Prepare the journal entries to record the first two interest payments. (Round your intermediate and final answers to the nearest whole
dollar.)
View transaction list
Journal entry worksheet
1
2
Record the first interest payment on June 30.
Note: Enter debits before credits.
Date
June 30
General Journal
Debit
Credit
>
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Step 1 - Introduction.
VIEWStep 2 - Journal entry to record the issuance
VIEWStep 3 - Table for cash payment, amortization of premium and interest expense
VIEWStep 4 - Total Bond interest expense
VIEWStep 5 - Straight line amortization table for first two years
VIEWStep 6 - Journal entries for first two interest payment
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