On January 1, 2018, Loop Raceway issued 640 bonds, each with a face value of $1,000, a stated interest rate of 6 percent paid annually on December 31, and a maturity date of December 31, 2020. On the issue date, the market interest rate was 7 percent, so the total proceeds from the bond issue were $623,205. Loop uses the straight-line bond amortization method and adjusts for any rounding errors when recording interest in the final year. Required: 1. Make a bond amortization schedule. 2-5. Make the journal entries to record the bond issue, the interest payments on December 31, 2018 and 2019, the interest and face value payment on December 31, 2020 and the bond retirement. Assume the bonds are retired on January 1, 2020, at a price of 97. Required 1 Make a bond amortization schedule. Changes During the Period Ending Bond Liability Balances Period Cash Discount Interest Bonds Discount on Bonds Carrying Ended Paid Amortized Expense Payable Payable Value 01/01/18 [ ] [ ] [ $ ? ] [ ] [ ] [ $ ? ] 12/31/18 [ ] [ ] [ $ ? ] [ ] [ ] [ $ ? ] 12/31/19 [ ] [ ] [ $ ? ] [ ] [ ] [ $ ? ] 12/31/20 [ ] [ ] [ $ ? ] [ ] [ ] [ $ ? ] Required 2 to 5 Make the journal entries to record the bond issue, the interest payments on December 31, 2018 and 2019, the interest and face value payment on December 31, 2020 and the bond retirement. Assume the bonds are retired on January 1, 2020, at a price of 97. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Journal entry worksheet Record the issuance of 640 bonds at face value of $1,000 each for $623,205. (Note: Enter debits before credits.) Date General Journal Debit Credit Jan 01, 2018 [ ] [ ] [ ] Record the interest payment on December 31, 2018. (Note: Enter debits before credits.) Date General Journal Debit Credit Dec 31, 2018 [ ] [ ] [ ] Record the interest payment on December 31, 2019. (Note: Enter debits before credits.) Date General Journal Debit Credit Dec 31, 2019 [ ] [ ] [ ] Record the interest and face value payment on December 31, 2020. (Note: Enter debits before credits.) Date General Journal Debit Credit Dec 31, 2020 [ ] [ ] [ ] Record the retirement of the bonds at a quoted price of 97, assuming the bonds are retired on January 1, 2020. (Note: Enter debits before credits.) Date General Journal Debit Credit Jan 1, 2020 [ ] [ ] [ ]

On January 1, 2018, Loop Raceway issued 640 bonds, each with a face value of $1,000, a stated interest rate of 6 percent paid annually on December 31, and a maturity date of December 31, 2020. On the issue date, the market interest rate was 7 percent, so the total proceeds from the bond issue were $623,205. Loop uses the straight-line bond amortization method and adjusts for any rounding errors when recording interest in the final year. Required: 1. Make a bond amortization schedule. 2-5. Make the journal entries to record the bond issue, the interest payments on December 31, 2018 and 2019, the interest and face value payment on December 31, 2020 and the bond retirement. Assume the bonds are retired on January 1, 2020, at a price of 97. Required 1 Make a bond amortization schedule. Changes During the Period Ending Bond Liability Balances Period Cash Discount Interest Bonds Discount on Bonds Carrying Ended Paid Amortized Expense Payable Payable Value 01/01/18 [ ] [ ] [ $ ? ] [ ] [ ] [ $ ? ] 12/31/18 [ ] [ ] [ $ ? ] [ ] [ ] [ $ ? ] 12/31/19 [ ] [ ] [ $ ? ] [ ] [ ] [ $ ? ] 12/31/20 [ ] [ ] [ $ ? ] [ ] [ ] [ $ ? ] Required 2 to 5 Make the journal entries to record the bond issue, the interest payments on December 31, 2018 and 2019, the interest and face value payment on December 31, 2020 and the bond retirement. Assume the bonds are retired on January 1, 2020, at a price of 97. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Journal entry worksheet Record the issuance of 640 bonds at face value of $1,000 each for $623,205. (Note: Enter debits before credits.) Date General Journal Debit Credit Jan 01, 2018 [ ] [ ] [ ] Record the interest payment on December 31, 2018. (Note: Enter debits before credits.) Date General Journal Debit Credit Dec 31, 2018 [ ] [ ] [ ] Record the interest payment on December 31, 2019. (Note: Enter debits before credits.) Date General Journal Debit Credit Dec 31, 2019 [ ] [ ] [ ] Record the interest and face value payment on December 31, 2020. (Note: Enter debits before credits.) Date General Journal Debit Credit Dec 31, 2020 [ ] [ ] [ ] Record the retirement of the bonds at a quoted price of 97, assuming the bonds are retired on January 1, 2020. (Note: Enter debits before credits.) Date General Journal Debit Credit Jan 1, 2020 [ ] [ ] [ ]

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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Related questions

Question

Required:

1. Make a bond amortization schedule.
2-5. Make the journal entries to record the bond issue, the interest payments on December 31, 2018 and 2019, the interest and face value payment on December 31, 2020 and the bond retirement. Assume the bonds are retired on January 1, 2020, at a price of 97.

Required 1

Make a bond amortization schedule.

Changes During the Period Ending Bond Liability Balances

Period Cash Discount Interest Bonds Discount on Bonds Carrying

Ended Paid Amortized Expense Payable Payable Value

01/01/18 [ ] [ ] [ $ ? ] [ ] [ ] [ $ ? ]

12/31/18 [ ] [ ] [ $ ? ] [ ] [ ] [ $ ? ]

12/31/19 [ ] [ ] [ $ ? ] [ ] [ ] [ $ ? ]

12/31/20 [ ] [ ] [ $ ? ] [ ] [ ] [ $ ? ]

Required 2 to 5

Make the journal entries to record the bond issue, the interest payments on December 31, 2018 and 2019, the interest and face value payment on December 31, 2020 and the bond retirement. Assume the bonds are retired on January 1, 2020, at a price of 97. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Journal entry worksheet

Record the issuance of 640 bonds at face value of $1,000 each for $623,205. (Note: Enter debits before credits.)