(Learning Objective 2: Issue bonds payable (discount); record interest paymentsand the related bond amortization using the effective-interest method) Winter Ltd. isauthorized to issue $2,500,000 of 4%, 10-year bonds payable. On December 31, 2018, whenthe market interest rate is 5%, the company issues $2,000,000 of the bonds. Winter amortizesbond discount using the effective-interest method. The semiannual interest dates are June 30and December 31.Requirements1. Use the PV function in Excel to calculate the issue price of the bonds.2. Prepare a bond amortization table for the term of the bonds using Excel.3. Record the issuance of the bonds payable on December 31, 2018; the first semiannualinterest payment on June 30, 2019; and the second payment on December 31, 2019.
(Learning Objective 2: Issue bonds payable (discount); record interest payments
and the related bond amortization using the effective-interest method) Winter Ltd. is
authorized to issue $2,500,000 of 4%, 10-year bonds payable. On December 31, 2018, when
the market interest rate is 5%, the company issues $2,000,000 of the bonds. Winter amortizes
bond discount using the effective-interest method. The semiannual interest dates are June 30
and December 31.
Requirements
1. Use the PV function in Excel to calculate the issue price of the bonds.
2. Prepare a bond amortization table for the term of the bonds using Excel.
3. Record the issuance of the bonds payable on December 31, 2018; the first semiannual
interest payment on June 30, 2019; and the second payment on December 31, 2019.
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