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 View transaction list $ 26,116 ⠀ 25,153 25,053 24,950 24,843 24,733 24,616 $504,000 $ 457,836 28,000 28,000 28,000 28,000 28,000 28,000 (B) Period Interest Expense (E) x 7.0% x 6/12 O Issued at discount Issued at premium Issued at premium & discount Required: 1. Bond Issue A a. Were the bond A issued at a premium and/or discount? Date June 01, 2020 Journal entry worksheet Record entry b. Journalize the issuance of bond A on June 1, 2020. Note: Enter debits before credits. (C) Amort. (A) (B) $ 1,884 ⠀ 2,847 2,947 3,050 3,157 *Adjusted for rounding (For all requirements, do not round intermediate calculations. Round the final answers to the nearest whole dollar.) 3,267 3,384 $46,164 Clear entry Record the sale of bonds at a premium on the original issue date. General Journal (D) Unamortized Balance $46,164 44,280 ⠀ 15,805 12,858 c. What is the contract interest rate for the issue bond A? 9,808 6,651 3,384 0 (E) Carrying Value $700,000 + (D) $746,164 744,280 1 715,805 Debit 712,858 709,808 706,651 703,384 700,000 Credit View general journal
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 View transaction list $ 26,116 ⠀ 25,153 25,053 24,950 24,843 24,733 24,616 $504,000 $ 457,836 28,000 28,000 28,000 28,000 28,000 28,000 (B) Period Interest Expense (E) x 7.0% x 6/12 O Issued at discount Issued at premium Issued at premium & discount Required: 1. Bond Issue A a. Were the bond A issued at a premium and/or discount? Date June 01, 2020 Journal entry worksheet Record entry b. Journalize the issuance of bond A on June 1, 2020. Note: Enter debits before credits. (C) Amort. (A) (B) $ 1,884 ⠀ 2,847 2,947 3,050 3,157 *Adjusted for rounding (For all requirements, do not round intermediate calculations. Round the final answers to the nearest whole dollar.) 3,267 3,384 $46,164 Clear entry Record the sale of bonds at a premium on the original issue date. General Journal (D) Unamortized Balance $46,164 44,280 ⠀ 15,805 12,858 c. What is the contract interest rate for the issue bond A? 9,808 6,651 3,384 0 (E) Carrying Value $700,000 + (D) $746,164 744,280 1 715,805 Debit 712,858 709,808 706,651 703,384 700,000 Credit View general journal
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
1
Transcribed Image Text: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
View transaction list
(A)
Cash
Interest
Paid
$700,000 x (E) x 7.0% x
8.8% x 6/12 6/12
$ 28,000
E
28,000
28,000
28,000
1
$ 26,116
:
25,153
25,053
24,950
24,843
24,733
24,616
$504,000 $ 457,836
28,000
28,000
28,000
O Issued at discount
O Issued at premium
O Issued at premium & discount
Required:
1. Bond Issue A
a. Were the bond A issued at a premium and/or discount?
Date
June 01, 2020
(B)
Period
Record entry
Interest
Expense
b. Journalize the issuance of bond A on June 1, 2020.
Journal entry worksheet
*Adjusted for rounding
(For all requirements, do not round intermediate calculations. Round the final answers to the nearest whole dollar.)
Note: Enter debits before credits.
Contract interest rate
(C)
Amort.
(A) (B)
Record the sale of bonds at a premium on the original issue date.
$ 1,884
⠀
2,847
2,947
3,050
3,157
3,267
3,384
$46,164
%
Clear entry
General Journal
c. What is the contract interest rate for the issue bond A?
(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
⠀
Debit
715,805
712,858
709,808
706,651
703,384
700,000
Credit
View general journal
>
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