On January 1, 2020, Swifty Company sold 12% bonds having a maturity value of $450.000 for $484,117. which provides thebondholders with a 10% yield. The bonds are dated January 1,2020, and mature January 1.2025, with interest payable December 31of each year. Swifty Company allocates interest and unamortized discount or premium on the effective-interest basis,(a)Your answer is correct.Prepare the journal entry at the date of the bond issuance. (Round answer to O decimal places, eg 38,548. If no entry is required,select "No Entry for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount isentered. Do not indent manually)DateAccount Titles and ExplanationDebitCreditJanuary 1.2020Cash484117Bonds Payable450000Premium on Bonds Payable34117Attempts. 2 of3 used(b)Prepare a schedule of interest expense and bond amortization for 2020-2022. Round answer to O decimal places, e 3854)Schedule of Interest Expense and Bond Premium AmortizationEffective-Interest MethodCashDateInterestPremiumCarryAmount olPaidExpenseAmortized1/1/2012/31/2012/31/2112/31/22Prepare a schedule of interest expense and bond amortization for 2020-2022. (Round answer to 0 decimal ploces, es 38,548)Schedule of Interest Expense and Bond Premium AmortizationEffective-Interest MethodCashInterestPremiumAmortizedCarryingAmount of BondsPaidExpense

Solution: When stated interest rate is higher than market interest rate than bonds are issued at…

On January 1. 2020, Swifty Company sold 12% bonds having a maturity vallue of $450.000 for $484,117, which provides the bondholders with a 10% yield. The bonds are dated January 1,2020, and mature January 1.2025, with interest payable December 31 of each year. Swifty Company allocates interest and unamortized discount or premium on the effective interest basis, (a) Your answer is correct. Prepare the journal entry at the date of the bond issuance. (Round answer to O decimal places, eg 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are outomatically indented when amount is entered. Do not indent manually)

On January 1. 2020, Swifty Company sold 12% bonds having a maturity vallue of $450.000 for $484,117, which provides the bondholders with a 10% yield. The bonds are dated January 1,2020, and mature January 1.2025, with interest payable December 31 of each year. Swifty Company allocates interest and unamortized discount or premium on the effective interest basis, (a) Your answer is correct. Prepare the journal entry at the date of the bond issuance. (Round answer to O decimal places, eg 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are outomatically indented when amount is entered. Do not indent manually)

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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