PR 14-3A Bond premium, entries for bonds payable transactions O’Halloran, Inc. produces and sells outdoor equipment. On July 1, Year 1,O’Halloran, Inc. issued $32,000,000 of 6-year, 8% bonds at a market (effective) interest rate of 7%, receiving cash of $33,546,022. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Instructions 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bond on July 1, Year 1. 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar. b. The second semiannual interest payment on June 30, Year 2, and theamortization of the bond premium, using the straight-line method. Round to the nearest dollar. 3. Determine the total interest expense for Year 1
PR 14-3A Bond premium, entries for bonds payable transactions O’Halloran, Inc. produces and sells outdoor equipment. On July 1, Year 1,O’Halloran, Inc. issued $32,000,000 of 6-year, 8% bonds at a market (effective) interest rate of 7%, receiving cash of $33,546,022. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Instructions 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bond on July 1, Year 1. 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar. b. The second semiannual interest payment on June 30, Year 2, and theamortization of the bond premium, using the straight-line method. Round to the nearest dollar. 3. Determine the total interest expense for Year 1
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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PR 14-3A Bond premium, entries for bonds payable transactions
O’Halloran, Inc. produces and sells outdoor equipment. On July 1, Year 1,O’Halloran, Inc. issued $32,000,000 of 6-year, 8% bonds at a market (effective) interest rate of 7%, receiving cash of $33,546,022. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Instructions
1.
2. Journalize the entries to record the following:
a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar.
b. The second semiannual interest payment on June 30, Year 2, and theamortization of the bond premium, using the straight-line method.
Round to the nearest dollar.
3. Determine the total interest expense for Year 1.
Transcribed Image Text:**Problem 14-3A**
**Question 1**
- Wrong
- Wrong
- Wrong
This section contains three horizontal bars. Each bar is divided into two segments: a larger blue section labeled "Wrong" and a smaller yellow section with no label.
**Question 2**
- a.
- Wrong
- Wrong
- Wrong
This subsection includes three horizontal bars, similar to Question 1. Each bar has a blue section labeled "Wrong" and a smaller yellow section at the end.
- b.
- Wrong
- Wrong
- Wrong
This subsection mirrors part (a) with three horizontal bars, each comprised of a larger blue section labeled "Wrong" and a smaller yellow portion.
**Question 3**
This section has one horizontal yellow bar, which is unlabeled.
Transcribed Image Text:**PR 14-3A Bond Premium, Entries for Bonds Payable Transactions**
O'Halloran, Inc. produces and sells outdoor equipment. On July 1, Year 1, O'Halloran, Inc. issued $32,000,000 of 6-year, 8% bonds at a market (effective) interest rate of 7%, receiving cash of $33,546,022. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
**Instructions**
1. Journalize the entry to record the amount of cash proceeds from the issuance of the bond on July 1, Year 1.
2. Journalize the entries to record the following:
- a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar.
- b. The second semiannual interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar.
3. Determine the total interest expense for Year 1.
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