O'Halloran, Inc. produces and sells outdoor equipment. On July 1. Year 1, O'Halloran, Inc., issued $32.000.000 of 6-year, 8% bonds at a market (effective) interest rate of 7%. receiving cash of S33.540.022. Interest on the bonds is payable semiannually on December 31 and June 30. The fscal year of the company is the calendar year. Required: 1. Joumalize the entry to record the amount of cash proceeds from the issuance of the bonda 2. Joumalize the entries to record the following a. The firat semiannual intereat payment on December 31, Year 1, and the amortization of the bond premium, using the intereat method. Round to the nearest dollar. b. The intereat payment on June 30, Year 2, and the amortization of the bond premium, using the intereat method. Round to the nearest dollar. 3. Determine the total intereat expense for Year 1. "Refer to the chart of accounts for the exact wording of the account titles. CNOW joumals do not use ines for joumal explanations. Every line on a journal page is used for debit or credit entries. CNOW joumals will automatically indent a credit entry when a credit amount is entered.
O'Halloran, Inc. produces and sells outdoor equipment. On July 1. Year 1, O'Halloran, Inc., issued $32.000.000 of 6-year, 8% bonds at a market (effective) interest rate of 7%. receiving cash of S33.540.022. Interest on the bonds is payable semiannually on December 31 and June 30. The fscal year of the company is the calendar year. Required: 1. Joumalize the entry to record the amount of cash proceeds from the issuance of the bonda 2. Joumalize the entries to record the following a. The firat semiannual intereat payment on December 31, Year 1, and the amortization of the bond premium, using the intereat method. Round to the nearest dollar. b. The intereat payment on June 30, Year 2, and the amortization of the bond premium, using the intereat method. Round to the nearest dollar. 3. Determine the total intereat expense for Year 1. "Refer to the chart of accounts for the exact wording of the account titles. CNOW joumals do not use ines for joumal explanations. Every line on a journal page is used for debit or credit entries. CNOW joumals will automatically indent a credit entry when a credit amount is entered.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Instructions
Chart of Accounts
Journal
Final Question
Instructions
O'Halloran, Inc., produces and sells outdoor equipment. On July 1, Year 1, O'Halloran, Inc., issued $32.000,000 of 6-year, 8% bonds at a market (effective) interest rate of 7%, receiving cash of $33,546,022. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Required:
1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds.*
2. Journalize the entries to record the following:*
a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the interest method.
Round to the nearest dollar.
b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the interest method. Round to the nearest
dollar.
3. Determine the total interest expense for Year 1.
*Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line
on a journal page is used for debit or credit entries. CNOW joumals will automaticaliy indent a credit entry when a credit amount is entered.
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