On January 1, 2024, Surreal Manufacturing issued 530 bonds, each with a face value of $1,000, a stated interest rate of 3 percent paid annually on December 31, and a maturity date of December 31, 2026. On the issue date, the market interest rate was 4 percent, so the total proceeds from the bond issue were $515,294. Surreal uses the effective-interest bond amortization method and adjusts for any rounding errors when recording interest in the final year. Required: 1. Prepare a bond amortization schedule. 2-5. Prepare the journal entries to record the bond issue, the interest payments on December 31, 2024 and 2025, the interest and face value payment on December 31, 2026 and the bond retirement. Assume the bonds are retired early on January 1, 2026 instead of at their maturity date of 12/31/2026, record the entry to retire the bonds early assuming a price of 103. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 5 Prepare a bond amortization schedule. Note: Round your answers to the nearest whole dollar. Make sure that the Carrying value equals face value of the bond in the last period. Interest expense in the last period will result in the amount in Discount Amortized equaling Discount on Bonds Payable. Journal Entry Components Balance Sheet Accounts Period Ended Interest Expense 01/01/24 12/31/24 12/31/25 12/31/26 Cash Paid Amortized Discount Bonds Payable Discount on Bonds Payable Carrying Value < Req 1 Req 2 to 5 > On January 1, 2024, Surreal Manufacturing issued 530 bonds, each with a face value of $1,000, a stated interest rate of 3 percent paid annually on December 31, and a maturity date of December 31, 2026. On the issue date, the market interest rate was 4 percent, so the total proceeds from the bond issue were $515,294. Surreal uses the effective-interest bond amortization method and adjusts for any rounding errors when recording interest in the final year. Required: 1. Prepare a bond amortization schedule. 2-5. Prepare the journal entries to record the bond issue, the interest payments on December 31, 2024 and 2025, the interest and face value payment on December 31, 2026 and the bond retirement. Assume the bonds are retired early on January 1, 2026 instead of at their maturity date of 12/31/2026, record the entry to retire the bonds early assuming a price of 103. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 5 Prepare the journal entries to record the bond issue, the interest payments on December 31, 2024 and 2025, the interest and face value payment on December 31, 2026 and the bond retirement. Assume the bonds are retired early on January 1, 2026 instead of at their maturity date of 12/31/2026, record the entry to retire the bonds early assuming a price of 103. Note: If no entry is required for a transaction or event, select "No Journal Entry Required" in the first account field. Round your answers to the nearest whole dollar amount. View transaction list Journal entry worksheet > 1 2345 Record the issuance of 530 bonds at face value of $1,000 each for $515,294. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit Record entry Clear entry View general journal Show less▲

On January 1, 2024, Surreal Manufacturing issued 530 bonds, each with a face value of $1,000, a stated interest rate of 3 percent paid annually on December 31, and a maturity date of December 31, 2026. On the issue date, the market interest rate was 4 percent, so the total proceeds from the bond issue were $515,294. Surreal uses the effective-interest bond amortization method and adjusts for any rounding errors when recording interest in the final year. Required: 1. Prepare a bond amortization schedule. 2-5. Prepare the journal entries to record the bond issue, the interest payments on December 31, 2024 and 2025, the interest and face value payment on December 31, 2026 and the bond retirement. Assume the bonds are retired early on January 1, 2026 instead of at their maturity date of 12/31/2026, record the entry to retire the bonds early assuming a price of 103. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 5 Prepare a bond amortization schedule. Note: Round your answers to the nearest whole dollar. Make sure that the Carrying value equals face value of the bond in the last period. Interest expense in the last period will result in the amount in Discount Amortized equaling Discount on Bonds Payable. Journal Entry Components Balance Sheet Accounts Period Ended Interest Expense 01/01/24 12/31/24 12/31/25 12/31/26 Cash Paid Amortized Discount Bonds Payable Discount on Bonds Payable Carrying Value < Req 1 Req 2 to 5 > On January 1, 2024, Surreal Manufacturing issued 530 bonds, each with a face value of $1,000, a stated interest rate of 3 percent paid annually on December 31, and a maturity date of December 31, 2026. On the issue date, the market interest rate was 4 percent, so the total proceeds from the bond issue were $515,294. Surreal uses the effective-interest bond amortization method and adjusts for any rounding errors when recording interest in the final year. Required: 1. Prepare a bond amortization schedule. 2-5. Prepare the journal entries to record the bond issue, the interest payments on December 31, 2024 and 2025, the interest and face value payment on December 31, 2026 and the bond retirement. Assume the bonds are retired early on January 1, 2026 instead of at their maturity date of 12/31/2026, record the entry to retire the bonds early assuming a price of 103. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 5 Prepare the journal entries to record the bond issue, the interest payments on December 31, 2024 and 2025, the interest and face value payment on December 31, 2026 and the bond retirement. Assume the bonds are retired early on January 1, 2026 instead of at their maturity date of 12/31/2026, record the entry to retire the bonds early assuming a price of 103. Note: If no entry is required for a transaction or event, select "No Journal Entry Required" in the first account field. Round your answers to the nearest whole dollar amount. View transaction list Journal entry worksheet > 1 2345 Record the issuance of 530 bonds at face value of $1,000 each for $515,294. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit Record entry Clear entry View general journal Show less▲

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...

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