On June 1, 2024, Carla Vista Bottle Company sold $2,880,000 in long-term bonds for $2,526,064. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective-interest method. * Your answer is incorrect. Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Include only the first four years. (Round answers to O decimal places, e.g. 25,000.) Credit Cash Debit Interest Expense Credit Bond Discount Carrying Amount of Bond 283200 $ 310495 $ 27295 283200 283200 313225 316227 3104954 3132249 30025 3162274 33027 3195302 283200 319530 36330 eTextbook and Media List of Accounts 3231632 Assistance Used Assistance Used Your answer is partially correct. Assuming that interest and discount amortization are recorded each May 31, prepare the adjusting entry to be made on December 31, 2026. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Round answers to O decimal places, e.g. 25,000.) Account Titles and Explanation Interest Expense Discount on Bonds Payable Interest Payable Debit 140000 Credit 13322 126678
On June 1, 2024, Carla Vista Bottle Company sold $2,880,000 in long-term bonds for $2,526,064. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective-interest method. * Your answer is incorrect. Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Include only the first four years. (Round answers to O decimal places, e.g. 25,000.) Credit Cash Debit Interest Expense Credit Bond Discount Carrying Amount of Bond 283200 $ 310495 $ 27295 283200 283200 313225 316227 3104954 3132249 30025 3162274 33027 3195302 283200 319530 36330 eTextbook and Media List of Accounts 3231632 Assistance Used Assistance Used Your answer is partially correct. Assuming that interest and discount amortization are recorded each May 31, prepare the adjusting entry to be made on December 31, 2026. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Round answers to O decimal places, e.g. 25,000.) Account Titles and Explanation Interest Expense Discount on Bonds Payable Interest Payable Debit 140000 Credit 13322 126678
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:On June 1, 2024, Carla Vista Bottle Company sold $2,880,000 in long-term bonds for $2,526,064. The bonds will mature in 10 years
and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to
be accounted for under the effective-interest method.
* Your answer is incorrect.
Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at
each May 31. Include only the first four years. (Round answers to O decimal places, e.g. 25,000.)
Credit Cash
Debit Interest Expense
Credit Bond Discount
Carrying Amount of Bond
283200
$
310495
$
27295
283200
283200
313225
316227
3104954
3132249
30025
3162274
33027
3195302
283200
319530
36330
eTextbook and Media
List of Accounts
3231632
Assistance Used
Assistance Used
Your answer is partially correct.
Assuming that interest and discount amortization are recorded each May 31, prepare the adjusting entry to be made on
December 31, 2026. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is
required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Round answers to O
decimal places, e.g. 25,000.)
Account Titles and Explanation
Interest Expense
Discount on Bonds Payable
Interest Payable
Debit
140000
Credit
13322
126678
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