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issues December 31. of 7%, 15-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and Problem 10-2A (Algo) Straight-Line: Amortization of bond premium LO P3 The bonds are issued at a price of $3,304,790. 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(d) 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.

issues December 31. of 7%, 15-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and Problem 10-2A (Algo) Straight-Line: Amortization of bond premium LO P3 The bonds are issued at a price of $3,304,790. 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(d) 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.

FINANCIAL ACCOUNTING
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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Hillside issues $2,700,000 of 7%, 15-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31. Problem 10-2A (Algo) Straight-Line: Amortization of bond premium LO P3 The bonds are issued at a price of $3,304,790. 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. Complete this question by entering your answers in the tabs below. Req 1 2(a) Req 2A to 2C 2(b) Req 3 For each semiannual period, compute (a) the cash payment, (b) the straight-line premium amortization, and (c) the bond interest expense. (Round your final answers to the nearest whole dollar.) Par (maturity) value i Bond price Req 4 Annual Rate Reg 5 Par (maturity value) Year Premium on Bonds Payable Semiannual cash Interest payment Semiannual periods Straight-line premium amortization
Transcribed Image Text:Hillside issues $2,700,000 of 7%, 15-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31. Problem 10-2A (Algo) Straight-Line: Amortization of bond premium LO P3 The bonds are issued at a price of $3,304,790. 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. Complete this question by entering your answers in the tabs below. Req 1 2(a) Req 2A to 2C 2(b) Req 3 For each semiannual period, compute (a) the cash payment, (b) the straight-line premium amortization, and (c) the bond interest expense. (Round your final answers to the nearest whole dollar.) Par (maturity) value i Bond price Req 4 Annual Rate Reg 5 Par (maturity value) Year Premium on Bonds Payable Semiannual cash Interest payment Semiannual periods Straight-line premium amortization
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