On January 1, 2020, Everly Bottle Company sold$3,000,000 in long-term bonds. The bonds will mature in 5 years and have astated interest rate of 8% and a yield rate of 10%. The bonds pay interestJuly 1 and January 1 of each year. The bonds are to be accounted for underthe effective-interest method.Instructions:1. Calculate the bond proceeds using the attached present value tables.2. Prepare a Bond Discount/Premium Amortization Schedule.3. Prepare the journal entry to record the bonds on the date of issue,January 1, 2020.4. Prepare the journal entry to record the first payment and amortization ofthe discount/premium on July 1, 2020.5. Prepare the journal entry to record the accrued interest and amortizationof the discount/premium on December 31, 2020.6. Prepare the journal entry to record the payment of the bonds atmaturity; January 1, 2025. Assume the appropriate accrual was made onDecember 31, 2024 (see 5. above) Table A-4 Present Value Interest Factors for a One-Dollar AnnuityDiscounted at k Percent for n Periods: PVIFA = [1 - 1/(1+ k)n] / kPeriod12346678910Period123456781%0.99011.97042.94109103.90204.85345.79556.72827.65178.56609.47131%0.99010.98030.97060.96100.95152%0.98041.94162.88393.80774.71350.94200.93270.92350.91430.90535.60146.47207.32558.16228.98262%0.98040.96120.9423Table A-3 Present Value Interest Factors for One Dollar Discounted at kPercent for n Periods: PVIF kn = 1/(1+k) "0.92380.90570.88803%0.97091.91362.82863.71714.57970.87060.85350.83680.82035.41726.23037.01977.78618.53023%0.97090.94260.91610.88850.86264%0.96151.88612.77513.62994.45180.83750.81310.78940.76640.74415.24216.00216.73277.43538.11094%0.96150.92460.88900.85480.82190.79030.75990.73075%0.95241.86942.72323.54604.32950.70260.67564.91735.58246.20987.10786.80177.7217 7.36015.07575.78646.46325%0.95240.90700.86380.82270.78356%0.94341.83342.67303.46514.21240.74620.71070.67680.64460.61396%0.94340.89000.83960.79210.74730.70500.66510.62740.59197%0.93461.80802.62433.38724.10020.55847%4.76654.62295.38935.20645.97135.74666.51526.24696.71017.02360.93460.87340.81638%0.92591.78332.57713.31213.99270.76290.71300.66630.62270.58200.54390.50838%0.92590.85730.79380.73500.68060.63029%10%0.91740.90911.7591 1.73552.53132.48693.23973.16993.88973.79080.58350.54030.50020.46324.48595.03305.53485.99525.75906.4177 6.14469%4.35534.86845.33490.91740.84170.77220.70840.64990.59630.54700.50190.46040.422410%0.90910.82640.75130.68300.62090.56450.51320.46650.42410.3856

On January 1, 2020, Everly Bottle Company sold $3,000,000 in long-term bonds. The bonds will mature in 5 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest July 1 and January 1 of each year. The bonds are to be accounted for under the effective-interest method. Instructions: 1. Calculate the bond proceeds using the attached present value tables. 2. Prepare a Bond Discount/Premium Amortization Schedule. 3. Prepare the journal entry to record the bonds on the date of issue, January 1, 2020.

On January 1, 2020, Everly Bottle Company sold $3,000,000 in long-term bonds. The bonds will mature in 5 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest July 1 and January 1 of each year. The bonds are to be accounted for under the effective-interest method. Instructions: 1. Calculate the bond proceeds using the attached present value tables. 2. Prepare a Bond Discount/Premium Amortization Schedule. 3. Prepare the journal entry to record the bonds on the date of issue, January 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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