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Legacy issues $325,000 of 5%, four-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31. They are issued at $292,181 when the market rate is 8%. Required: 1. Prepare the January 1 journal entry to record the bonds' issuance. 2. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 3. Prepare an effective interest amortization table for the bonds' first two years. 4. Prepare the journal entries to record the first two interest payments. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare an effective interest amortization table for the bonds' first two years. Note: Round your intermediate and final answers to the nearest whole dollar. Semiannual Interest Cash Interest Bond Interest Period-End Paid Expense 01/01/2021 06/30/2021 12/31/2021 06/30/2022 12/31/2022 $ 8,125 8,125 8,125 8,125 < Required 2 Discount Amortization Unamortized Discount Required 4 > Carrying Value 32,819 $ 292,181

Legacy issues $325,000 of 5%, four-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31. They are issued at $292,181 when the market rate is 8%. Required: 1. Prepare the January 1 journal entry to record the bonds' issuance. 2. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 3. Prepare an effective interest amortization table for the bonds' first two years. 4. Prepare the journal entries to record the first two interest payments. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare an effective interest amortization table for the bonds' first two years. Note: Round your intermediate and final answers to the nearest whole dollar. Semiannual Interest Cash Interest Bond Interest Period-End Paid Expense 01/01/2021 06/30/2021 12/31/2021 06/30/2022 12/31/2022 $ 8,125 8,125 8,125 8,125 < Required 2 Discount Amortization Unamortized Discount Required 4 > Carrying Value 32,819 $ 292,181

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 7P: Wilbury Corporation issued 1 million of 13.5% bonds for 985,071.68. The bonds are dated and issued...
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Legacy issues $325,000 of 5%, four-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31. They are issued at $292,181 when the market rate is 8%. Required: 1. Prepare the January 1 journal entry to record the bonds' issuance. 2. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 3. Prepare an effective interest amortization table for the bonds' first two years. 4. Prepare the journal entries to record the first two interest payments. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare an effective interest amortization table for the bonds' first two years. Note: Round your intermediate and final answers to the nearest whole dollar. Semiannual Interest Cash Interest Paid Period-End 01/01/2021 06/30/2021 12/31/2021 06/30/2022 12/31/2022 $ 8,125 8,125 8,125 8,125 Bond Interest Expense < Required 2 Discount Amortization Unamortized Discount Required 4 > Carrying Value 32,819 $ 292,181
Transcribed Image Text:Legacy issues $325,000 of 5%, four-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31. They are issued at $292,181 when the market rate is 8%. Required: 1. Prepare the January 1 journal entry to record the bonds' issuance. 2. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 3. Prepare an effective interest amortization table for the bonds' first two years. 4. Prepare the journal entries to record the first two interest payments. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare an effective interest amortization table for the bonds' first two years. Note: Round your intermediate and final answers to the nearest whole dollar. Semiannual Interest Cash Interest Paid Period-End 01/01/2021 06/30/2021 12/31/2021 06/30/2022 12/31/2022 $ 8,125 8,125 8,125 8,125 Bond Interest Expense < Required 2 Discount Amortization Unamortized Discount Required 4 > Carrying Value 32,819 $ 292,181
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