Mahalo Boat Adventure Inc. has a July 31 year-end. It showed the following partial amortization schedules regarding two bond issues: Bond Issue A Period Ending June 1/23 (A) Cash Interest Paid $610,000 x 9.0% x 6/12 (B) Period Interest Expense (E) x 8.0% x 6/12 (c) Amort. (D) Unamortized (A) - (B) Balance $38,611 (E) Carrying Value $610,000 + (D) $ 648,611 Dec. 1/23 $ 27,450 $ 25,944 $ 1,506 37,105 647,105 Dec. 1/29 27,450 25,040 2,410 13,578 623,578 June 1/30 27,450 24,943 2,507 11,071 621,071 Dec. 1/30 27,450 24,843 2,607 8,464 618,464 June 1/31 27,450 24,739 2,711 5,753 615,753 Dec. 1/31 27,450 24,630 2,820 2,933 612,933 June 1/32 Totals 27,450 24,517 2,933 0 610,000 $ 494,100 $ 455,489 $38,611 "Adjusted for rounding (For all requirements, do not round intermediate calculations. Round the final answers to the nearest whole dollar.) Required: 1. Bond Issue A a. Were the bond A issued at a premium and/or discount? O Issued at discount O Issued at premium O Issued at premium & discount

Mahalo Boat Adventure Inc. has a July 31 year-end. It showed the following partial amortization schedules regarding two bond issues: Bond Issue A Period Ending June 1/23 (A) Cash Interest Paid $610,000 x 9.0% x 6/12 (B) Period Interest Expense (E) x 8.0% x 6/12 (c) Amort. (D) Unamortized (A) - (B) Balance $38,611 (E) Carrying Value $610,000 + (D) $ 648,611 Dec. 1/23 $ 27,450 $ 25,944 $ 1,506 37,105 647,105 Dec. 1/29 27,450 25,040 2,410 13,578 623,578 June 1/30 27,450 24,943 2,507 11,071 621,071 Dec. 1/30 27,450 24,843 2,607 8,464 618,464 June 1/31 27,450 24,739 2,711 5,753 615,753 Dec. 1/31 27,450 24,630 2,820 2,933 612,933 June 1/32 Totals 27,450 24,517 2,933 0 610,000 $ 494,100 $ 455,489 $38,611 "Adjusted for rounding (For all requirements, do not round intermediate calculations. Round the final answers to the nearest whole dollar.) Required: 1. Bond Issue A a. Were the bond A issued at a premium and/or discount? O Issued at discount O Issued at premium O Issued at premium & discount

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 96PSA

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Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $540,000. Interest is payable annually. The premium is amortized using the straightline method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. June 30, 2019: entry to record payment of interest to bondholders C. June 30, 2019: entry to record amortization of premium D. June 30, 2020: entry to record payment of interest to bondholders E. June 30, 2020: entry to record amortization of premium
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Mahalo Boat Adventure Inc. has a July 31 year-end. It showed the following partial amortization schedules regarding two bond issues: Bond Issue A Period Ending June 1/20 Dec. 1/20 : Dec. 1/26 June 1/27 Dec. 1/27 June 1/28 Dec. 1/28 June 1/29 Totals (A) Cash Interest Paid $700,000 8.0% × 6/12 $ 28,000 : 28,000 28,000 28,000 (B) Period Interest Expense (E) x 7.0% x 6/12 $ 26,116 25, 153 25,053 24,950 24,843 24, 733 24,616 $504,000 $ 457,836 28,000 28,000 28,000 (C) Amort. (A) (B) $ 1,884 : 2,847 2,947 3,050 3,157 3,267 3,384 $46,164 (D) Unamortized Balance $46,164 44,280 : 15,805 12,858 9,808 6,651 3,384 0 (E) Carrying Value $700,000 + (D) $ 746, 164 744,280 715,805 712,858 709,808 706,651 703,384 700,000 *Adjusted for rounding (For all requirements, do not round intermediate calculations. Round the final answers to the nearest whole dollar.)
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