Premium on Bonds Payable (Debit) Cash Interest Premium on Bonds Payable Рayment (Credit) Expense (Debit) Carrying Value Period Balance At issue $12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 $20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 $420,000 418,000 416,000 414,000 412,000 410,000 408,000 406,000 404,000 402,000 400,000 06/30/20 $14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 $2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 12/31/20 06/30/21 12/31/21 06/30/22 12/31/22 06/30/23 12/31/23 06/30/24 12/31/24
Premium on Bonds Payable (Debit) Cash Interest Premium on Bonds Payable Рayment (Credit) Expense (Debit) Carrying Value Period Balance At issue $12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 $20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 $420,000 418,000 416,000 414,000 412,000 410,000 408,000 406,000 404,000 402,000 400,000 06/30/20 $14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 $2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 12/31/20 06/30/21 12/31/21 06/30/22 12/31/22 06/30/23 12/31/23 06/30/24 12/31/24
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
For Dingle Corporation, the following amortization table was prepared when $400,000 of 5-year, 7% bonds were sold on January 1, 2020, for $420,000. Required: 1. Prepare the entry to recognize the issuance of the bonds on January 1, 2020. 2. Prepare the entry to recognize the first interest payment on June 30, 2020. 3. Determine what interest expense for this bond issue Dingle will report in its 2021 income statement. 4. Indicate how these bonds will appear in Dingle’s December 31, 2023 balance sheet. |
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