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Lopez Plastics Co. (LPC) issued $200,000 of 10% callable bonds on January 1, 2021, dated January 1, 2021 and due on January 1, 2026. The interest is to be paid twice a year on January 1 and July 1. The bonds were sold to yield 8% effective annual interest. LPC incurred $5,000 in bond issue costs. LPC closes its books annually on December 31. Present value of a single sum for 5 periods Present value of a single sum for 10 periods Present value of an annuity for 5 periods Present value of an annuity for 10 periods Instructions 1/1/21 6/30/21 12/31/21 4% 6/30/22 12/31/22 5% (b) Prepare the journal entry for bond issuance. 8% (a) Complete the following amortization schedule for the dates indicated. (Round all answers to the nearest dollar.) Use the effective-interest method. Credit Cash Interest Expense Amortization Carrying Amount 10% 82193 78353 62092 .61391 38554 67556 4.45182 4.32948 3.99271 3.79079 8.11090 7.72173 6.71008 6.14457 68058 46319

Lopez Plastics Co. (LPC) issued $200,000 of 10% callable bonds on January 1, 2021, dated January 1, 2021 and due on January 1, 2026. The interest is to be paid twice a year on January 1 and July 1. The bonds were sold to yield 8% effective annual interest. LPC incurred $5,000 in bond issue costs. LPC closes its books annually on December 31. Present value of a single sum for 5 periods Present value of a single sum for 10 periods Present value of an annuity for 5 periods Present value of an annuity for 10 periods Instructions 1/1/21 6/30/21 12/31/21 4% 6/30/22 12/31/22 5% (b) Prepare the journal entry for bond issuance. 8% (a) Complete the following amortization schedule for the dates indicated. (Round all answers to the nearest dollar.) Use the effective-interest method. Credit Cash Interest Expense Amortization Carrying Amount 10% 82193 78353 62092 .61391 38554 67556 4.45182 4.32948 3.99271 3.79079 8.11090 7.72173 6.71008 6.14457 68058 46319

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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(25 pts) Lopez Plastics Co. (LPC) issued $200,000 of 10% callable bonds on January 1, 2021, dated January 1, 2021 and due on January 1, 2026. The interest is to be paid twice a year on January 1 and July 1. The bonds were sold to yield 8% effective annual interest. LPC incurred $5,000 in bond issue costs. LPC closes its books annually on December 31. Instructions 78353 Present value of a single sum for 5 periods Present value of a single sum for 10 periods.67556 Present value of an annuity for 5 periods .61391 4.45182 4.32948 Present value of an annuity for 10 periods 8.11090 7.72173 4% 1/1/21 6/30/21 12/31/21 6/30/22 12/31/22 82193 (b) Prepare the journal entry for bond issuance. 5% (a) Complete the following amortization schedule for the dates indicated. (Round all answers to the nearest dollar.) Use the effective-interest method. Credit Cash Interest Expense Amortization Carrying Amount (c) Prepare the adjusting entry for December 31, 2021. 8% 10% 68058 .62092 46319 38554 3.99271 3.79079 6.71008 6.14457
Transcribed Image Text:(25 pts) Lopez Plastics Co. (LPC) issued $200,000 of 10% callable bonds on January 1, 2021, dated January 1, 2021 and due on January 1, 2026. The interest is to be paid twice a year on January 1 and July 1. The bonds were sold to yield 8% effective annual interest. LPC incurred $5,000 in bond issue costs. LPC closes its books annually on December 31. Instructions 78353 Present value of a single sum for 5 periods Present value of a single sum for 10 periods.67556 Present value of an annuity for 5 periods .61391 4.45182 4.32948 Present value of an annuity for 10 periods 8.11090 7.72173 4% 1/1/21 6/30/21 12/31/21 6/30/22 12/31/22 82193 (b) Prepare the journal entry for bond issuance. 5% (a) Complete the following amortization schedule for the dates indicated. (Round all answers to the nearest dollar.) Use the effective-interest method. Credit Cash Interest Expense Amortization Carrying Amount (c) Prepare the adjusting entry for December 31, 2021. 8% 10% 68058 .62092 46319 38554 3.99271 3.79079 6.71008 6.14457
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