Mahalo Boat Adventure Inc. has a July 31 year-end. It showed the following partial amortization schedules regarding two bond issues: "Pic" a. Were the bond B issued at a premium and/or discount? - Discount b. Journalize the issuance of bond B on April 1, 2021. c. What is the contract interest rate for the issue bond B? - 8% d. Interest of how much is paid how often for bond B issued? - 10,800 Quarterly e. What is the term of bond B issue? f. Show how bond B would appear on the balance sheet under non-current liabilities at July 31, 2029. g. Calculate the bond B interest expense that would appear on the income statement for the year ended July 31, 2030. h. Independent of (a) through (g), assume that bond B issues was retired on December 1, 2030, at 97. Record the entries. - Record the interest paid on bonds. - Record the retired bonds.
Mahalo Boat Adventure Inc. has a July 31 year-end. It showed the following partial amortization schedules regarding two bond issues: "Pic" a. Were the bond B issued at a premium and/or discount? - Discount b. Journalize the issuance of bond B on April 1, 2021. c. What is the contract interest rate for the issue bond B? - 8% d. Interest of how much is paid how often for bond B issued? - 10,800 Quarterly e. What is the term of bond B issue? f. Show how bond B would appear on the balance sheet under non-current liabilities at July 31, 2029. g. Calculate the bond B interest expense that would appear on the income statement for the year ended July 31, 2030. h. Independent of (a) through (g), assume that bond B issues was retired on December 1, 2030, at 97. Record the entries. - Record the interest paid on bonds. - Record the retired bonds.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Mahalo Boat Adventure Inc. has a July 31 year-end. It showed the following partial amortization schedules regarding two bond issues:
"Pic"
a. Were the bond B issued at a premium and/or discount?
- Discount
b. Journalize the issuance of bond B on April 1, 2021.
c. What is the contract interest rate for the issue bond B?
- 8%
d. Interest of how much is paid how often for bond B issued?
- 10,800 Quarterly
e. What is the term of bond B issue?
f. Show how bond B would appear on the balance sheet under non-current liabilities at July 31, 2029.
g. Calculate the bond B interest expense that would appear on the income statement for the year ended July 31, 2030.
h. Independent of (a) through (g), assume that bond B issues was retired on December 1, 2030, at 97. Record the entries.
- Record the interest paid on bonds.
- Record the retired bonds.
Transcribed Image Text:Bond Issue B
Period Ending
Apr. 1/21
Jul. 1/21
⠀
Apr. 1/29
Jul. 1/29
Oct. 1/29
Jan. 1/30
Apr. 1/30
Jul. 1/30
Oct. 1/30
Jan. 1/31
Apr. 1/31
Totals
(A)
Cash
Interest Paid
$540,000 x
8% x 3/12
*Adjusted for rounding
$ 10,800
E
10,800
10,800
10,800
10,800
10,800
10,800
10,800
10,800
10,800
$ 432,000
(B)
Period
Interest
Expense
(E) x 8.5% *
3/12
$ 11,091
11,359
11,370
11,383
11,395
11,408
11,421
11,434
11,447
11,460*
$ 450,067
(C)
Amort.
(A) (B)
$ 291
559
570
583
595
608
621
634
647
660
$18,067
(D)
Unamortized
Balance
$18,067
17,776
:
4,918
4,348
3,765
3,170
2,562
1,941
1,307
660
0
(E)
Carrying
Value
$540,000
(D)
$ 521,933
522,224
535,082
535,652
536, 235
536,830
537,438
538,059
538,693
539,340
540,000
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