Otter Products Inc. issued bonds on January 1, 2019. Interest is to be paid semi-annually. Other information is as follows: I 'm CONFUSEDI Term in years: 2 TiM CAMERON Ž15-600-7436 Face value of bonds issued: $200,000 $206,000 Issue price: Specified interest rate each payment period: 6% Required: 1 Calculate: a. The amount of interest paid in cash every payment period. b. The amount of amortization to be recorded at each interest payment date (use the straight- line method). 2 Complete this amortization table by calculating interest expense, and beginning and ending bond carrying amounts at the end of each period over two years. 206, 000 Amortization Table A D E el 3 % (A + D) Beg. bond Actual Periodic Periodic Ending bond carrying cash discount Period carrying interest interest (prem.) Year ending аmоunt expense paid amort. amount 206180 206365 206576 206, v00 2019 Jun. 30 206,160 6i85 206,385 Dec. 31 2020 Jun. 30 191 Dec. 31 206576 6197 197 2021 Jun. 30 Dec. 31 3 Calculate the actual interest rate under the straight-line method of amortization for each six- month period. Round all percentage calculations to two decimal placed. Use the following format: A Six month Bond Six-month period ending carrying interest amount expense Year (B/A) 2019 Jun. 30 Dec. 31 2020 Jun. 30 Dec. 31 2021 Jun. 30 Dec. 31 - 4 Prepare the journal entry for December 31, 2019.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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