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On January 1, 2022, Bridgeport Company issued $1,300,000 face value, 7%, 10-year bonds at $1,395,675. This price resulted in a 6% effective-interest rate on the bonds. Bridgeport uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest on each January 1. Prepare the journal entries to record the following transactions. (Round answers to O decimal places, eg. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.) 1. The issuance of the bonds on January 1, 2022. 2. Accrual of interest and amortization of the premium on December 31, 2022. 3. The payment of interest on January 1, 2023. 4. Accrual of interest and amortization of the premium on December 31, 2023. No. Date Account Titles and Explanation Debit Credit Jan. 1, 1. Cash 1,395,675 2022 Bonds Payable 1,300, Premium on Bonds Payable 95 Dec. 31, 2. Interest Expense 83740.5 2022 Premium on Bonds Payable 7259.5 Interest Payable 91 Jan. 1, 3. Interest Payable 91000 2023 Cash 91 Dec. 31, 4. Interest Expense 2023 Premium on Bonds Payable n onE Interest Payable 91

On January 1, 2022, Bridgeport Company issued $1,300,000 face value, 7%, 10-year bonds at $1,395,675. This price resulted in a 6% effective-interest rate on the bonds. Bridgeport uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest on each January 1. Prepare the journal entries to record the following transactions. (Round answers to O decimal places, eg. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.) 1. The issuance of the bonds on January 1, 2022. 2. Accrual of interest and amortization of the premium on December 31, 2022. 3. The payment of interest on January 1, 2023. 4. Accrual of interest and amortization of the premium on December 31, 2023. No. Date Account Titles and Explanation Debit Credit Jan. 1, 1. Cash 1,395,675 2022 Bonds Payable 1,300, Premium on Bonds Payable 95 Dec. 31, 2. Interest Expense 83740.5 2022 Premium on Bonds Payable 7259.5 Interest Payable 91 Jan. 1, 3. Interest Payable 91000 2023 Cash 91 Dec. 31, 4. Interest Expense 2023 Premium on Bonds Payable n onE Interest Payable 91

FINANCIAL ACCOUNTING
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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Please answer all of the entries in the following photos, thank you! (do not mind my answers, they might be incorrect). 

On January 1, 2022, Bridgeport Company issued $1,300,000 face value, 7%, 10-year bonds at $1,395,675. This price resulted in a 6% effective-interest rate on the bonds. Bridgeport uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest each January 1. **Prepare the journal entries to record the following transactions.** *(Round answers to 0 decimal places, e.g., 125. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)* 1. The issuance of the bonds on January 1, 2022. 2. Accrual of interest and amortization of the premium on December 31, 2022. 3. The payment of interest on January 1, 2023. 4. Accrual of interest and amortization of the premium on December 31, 2023. | No. | Date | Account Titles and Explanation | Debit | Credit | |-----|------|-------------------------------------------|----------|----------| | 1. | Jan. 1, 2022 | Cash | 1,395,675 | | | | | Bonds Payable | | 1,300,000 | | | | Premium on Bonds Payable | | 95,675 | | 2. | Dec. 31, 2022 | Interest Expense | 83,740.5 | | | | | Premium on Bonds Payable | 7,259.5 | | | | | Interest Payable | | 91,000 | | 3. | Jan. 1, 2023 | Interest Payable | 91,000 | | | | | Cash | | 91,000 | | 4. | Dec. 31, 2023 | Interest Expense | 83,325.7 | | | | | Premium on Bonds Payable | 7,674.3 | | | | | Interest Payable | | 91,000 | **Explanation of Transactions:** 1. **Issuance of Bonds (Jan. 1, 2022
Transcribed Image Text:On January 1, 2022, Bridgeport Company issued $1,300,000 face value, 7%, 10-year bonds at $1,395,675. This price resulted in a 6% effective-interest rate on the bonds. Bridgeport uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest each January 1. **Prepare the journal entries to record the following transactions.** *(Round answers to 0 decimal places, e.g., 125. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)* 1. The issuance of the bonds on January 1, 2022. 2. Accrual of interest and amortization of the premium on December 31, 2022. 3. The payment of interest on January 1, 2023. 4. Accrual of interest and amortization of the premium on December 31, 2023. | No. | Date | Account Titles and Explanation | Debit | Credit | |-----|------|-------------------------------------------|----------|----------| | 1. | Jan. 1, 2022 | Cash | 1,395,675 | | | | | Bonds Payable | | 1,300,000 | | | | Premium on Bonds Payable | | 95,675 | | 2. | Dec. 31, 2022 | Interest Expense | 83,740.5 | | | | | Premium on Bonds Payable | 7,259.5 | | | | | Interest Payable | | 91,000 | | 3. | Jan. 1, 2023 | Interest Payable | 91,000 | | | | | Cash | | 91,000 | | 4. | Dec. 31, 2023 | Interest Expense | 83,325.7 | | | | | Premium on Bonds Payable | 7,674.3 | | | | | Interest Payable | | 91,000 | **Explanation of Transactions:** 1. **Issuance of Bonds (Jan. 1, 2022
### Educational Content: Long-Term Liabilities and Interest Expense Reporting #### Long-Term Liabilities Balance Sheet Presentation **Task:** Show the proper long-term liabilities balance sheet presentation for the liability for bonds payable at December 31, 2023. **Instructions:** - Round answers to 0 decimal places (e.g., 125). **Balance Sheet Entry:** - **Title:** BRIDGEPORT COMPANY Balance Sheet (Partial) - **Fields:** - Dropdowns and input boxes for specifying and entering financial data. - Sections with currency values for detailing liabilities. #### Questions **1. Interest Expense Reporting for 2023** - **Question:** What amount of interest expense is reported for 2023? - **Instructions:** Round the answer to 0 decimal places (e.g., 125). - **Input Field:** Space provided for entering the interest expense amount. **2. Bond Interest Expense and Amortization Method** - **Question:** The bond interest expense reported in 2023 would be ________ the amount that would be reported if the straight-line method of amortization were used. - **Input Field:** Dropdown to select a comparison term (e.g., "greater than", "less than", "equal to"). ### Additional Resources - **eTextbook and Media:** Links to textbooks and media resources. - **List of Accounts:** Access to a detailed account list for financial entries. This exercise is designed to enhance understanding of how long-term liabilities for bonds payable are presented on a balance sheet and how interest expenses are calculated and reported, considering different methods of amortization.
Transcribed Image Text:### Educational Content: Long-Term Liabilities and Interest Expense Reporting #### Long-Term Liabilities Balance Sheet Presentation **Task:** Show the proper long-term liabilities balance sheet presentation for the liability for bonds payable at December 31, 2023. **Instructions:** - Round answers to 0 decimal places (e.g., 125). **Balance Sheet Entry:** - **Title:** BRIDGEPORT COMPANY Balance Sheet (Partial) - **Fields:** - Dropdowns and input boxes for specifying and entering financial data. - Sections with currency values for detailing liabilities. #### Questions **1. Interest Expense Reporting for 2023** - **Question:** What amount of interest expense is reported for 2023? - **Instructions:** Round the answer to 0 decimal places (e.g., 125). - **Input Field:** Space provided for entering the interest expense amount. **2. Bond Interest Expense and Amortization Method** - **Question:** The bond interest expense reported in 2023 would be ________ the amount that would be reported if the straight-line method of amortization were used. - **Input Field:** Dropdown to select a comparison term (e.g., "greater than", "less than", "equal to"). ### Additional Resources - **eTextbook and Media:** Links to textbooks and media resources. - **List of Accounts:** Access to a detailed account list for financial entries. This exercise is designed to enhance understanding of how long-term liabilities for bonds payable are presented on a balance sheet and how interest expenses are calculated and reported, considering different methods of amortization.
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