Problem 14-2A (Algo) Straight-Line: Amortization of bond premium LO P3 The bonds are issued at a price of $1,713,594. Required: 1. Prepare the January 1 journal entry to record the bonds’ issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line premium amortization. 2(c) For each semiannual period, complete the table below to calculate the bond interest expense. 3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 4. Prepare the first two years of a straight-line amortization table. 5. Prepare the journal entries to record the first two interest payments.
Problem 14-2A (Algo) Straight-Line: Amortization of bond premium LO P3 The bonds are issued at a price of $1,713,594. Required: 1. Prepare the January 1 journal entry to record the bonds’ issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line premium amortization. 2(c) For each semiannual period, complete the table below to calculate the bond interest expense. 3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 4. Prepare the first two years of a straight-line amortization table. 5. Prepare the journal entries to record the first two interest payments.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Hillside issues $1,400,000 of 5%, 15-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31.
Problem 14-2A (Algo) Straight-Line: Amortization of bond premium LO P3
The bonds are issued at a price of $1,713,594.
Required:
1. Prepare the January 1
2(a) For each semiannual period, complete the table below to calculate the cash payment.
2(b) For each semiannual period, complete the table below to calculate the straight-line premium amortization.
2(c) For each semiannual period, complete the table below to calculate the bond interest expense.
3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.
4. Prepare the first two years of a straight-line amortization table.
5. Prepare the journal entries to record the first two interest payments.
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Req 1
Req 2A to 2C
Req 3
End
01/01/2021
06/30/2021
12/31/2021
06/30/2022
12/31/2022
Semiannual Period- Unamortized
Premium
Prepare the first two years of a straight-line amortization table. (Round your intermediate and final answers to the nearest
whole dollar.)
Req 4
Carrying
Value
Req 5
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Req 1
Req 2A to 2C
payments of
Par value at maturity
Req 3
Total repaid
Less amount borrowed
Total bond interest expense
Req 4
Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.
Total bond interest expense over life of bonds:
Amount repaid:
$
0
Req 5
0
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