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Required: Part 1 Record the following entries: (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.) a. Issuance of the bonds on June 1, 2023 b. Payment of interest on December 1, 2023 c. Adjusting entry to accrue bond interest and discount amortization on January 31, 2024 d. Payment of interest on June 1, 2024

Required: Part 1 Record the following entries: (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.) a. Issuance of the bonds on June 1, 2023 b. Payment of interest on December 1, 2023 c. Adjusting entry to accrue bond interest and discount amortization on January 31, 2024 d. Payment of interest on June 1, 2024

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

On June 1, 2023, Shebandowan Investors Inc. issued a $4,900,000, 7%, three-year bond. Interest is to be paid semiannually beginning December 1, 2023. Assume that the market rate of interest is 8%.  Use TABLE 14A.1 and TABLE 14A.2. (Use appropriate factor(s) from the tables provided.)

Required:
Part 1
Record the following entries: (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.)

a. Issuance of the bonds on June 1, 2023
b. Payment of interest on December 1, 2023
c. Adjusting entry to accrue bond interest and discount amortization on January 31, 2024
d. Payment of interest on June 1, 2024

Assume Shebandowan Investors Inc. has a January 31 year-end.

Part 2
Show how the bonds will appear on the balance sheet under non-current liabilities at January 31, 2025. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.)

3.png TABLE 14A.1 Present Value of 1 Due in n Periods I W NOWN- 10 11 14 15 16 17 18 19 20 25 30 Periods 1% 7% 10% 12% 15% 0.9259 0.9174 0.9091 0.8929 0.8696 0.8264 0.7972 0.7561 0.7473 0.6663 0.6663 0.6302 0.5963 0:000 0.6227 0.5835 0.5470 ***** 1 0.9901 0.9804 0.9709 0.9615 0.9524 0.9434 0.9346 0.9803 0.9612 0.9426 0.9246 0.9070 0.8900 0.8900 0.8734 0.8573 0.8417 0.9706 0.9423 0.9151 0.8890 0.8638 0.8396 0.8396 0.8163 0.7938 0.7722 0.7513 0.7118 0.6575 0.9610 0.9238 0.8885 0.8548 0.8227 0.7921 0.7629 0.7350 0.7084 0.6830 0.6355 0.5718 0.9515 0.9057 0.8626 0.8219 0.7835 0.7130 0.6806 0.6499 0.6209 0.5674 0.4972 0.4972 0.9420 0.8880 0.8375 0.7903 0.7462 0.7050 0.5645 0.5066 0.4323 090 0.0000 Co 0.000000 OCCEA 0.9327 0.8706 0.8131 0.7599 0.7107 0.6651 0.5132 0.4523 0.3759 ******** M ***** ***** www.ww 0.9235 0.8535 0.7894 0.9235 0.853 0.7894 0.7307 0.6768 0.6274 0.5820 0.5403 0.5019 0.4665 0.4039 0.3269 0.6274 0.5020 0.5405 0:5019 0.4000 0.4099 0.9209 0.9143 0.8368 0.9143 0.030 0.7664 0.7026 0.6446 0.5919 0.5439 0.5002 0.4604 0.4241 0.3606 0.2843 04 0.9053 0.8203 0.7441 0.9053 0.6756 0.6139 0.5584 0.5083 0.4632 0.4224 0.3855 0.3220 0.2472 wwwwww www 0.4652 VIDELO 0.8963 0.8043 0.6043 0.7224 0.6496 0.5847 0.5268 0.4751 0.4289 0.3875 0.3505 0.2875 0.2149 12 0.8874 0.7885 0.7014 0.6246 0.5568 0.4970 0.4440 0.3971 0.3555 0.3186 0.2567 13 0.8787 0.7730 0.6810 0.6006 0.5303 0.4688 0.4150 0.3677 0.3262 0.2897 0.2292 0.1625 0.8700 0.7579 0.6611 0.6611 0.5775 0.5051 0.4423 0.3878 0.3405 0.2992 0.2633 0.2046 0.1413 0.7430 0.6419 0.5553 0.4810 04173 0.3624 0.3152 0.2745 0.2394 0.1827 0.1229 0.7284 0.6232 0.6232 0.5339 0.4581 0.3936 0.3387 0.2919 0.2519 0.2176 0.1631 0.1069 0.8444 4262 0.7142 0.6050 0.5134 0.4363 0.3714 0.3166 0.2703 0.2311 0.1978 0.1456 0.0929 2502 0.8360 0.7002 0.5874 0.4936 0.4155 0.3503 0.2959 0.2502 0.2120 0.1799 0.1300 0.0808 0.8277 0.6864 0.5703 0.4746 0.3957 0.3305 0.2765 0.2317 0.1945 0.1635 0.1161 0.0703 0.8195 0.6730 0.5537 0.4564 0.3769 0.3118 0.2584 0.2145 0.1784 0.1486 0.1037 0.0611 0.7798 0.6095 0.4776 0.3751 0.2953 0.2330 0.1842 0.1460 0.1160 0.0923 0.0588 0.0304 0.7419 0.5521 0.4120 0.3083 0.2314 0.1741 0.1314 0.0994 0.0754 0.0573 0.0334 0.0151 0.2534 0.1813 0.1301 0.0937 0.0676 0.0490 0.0356 0.0189 0.0075 0.2083 0.1420 0.0972 0.0972 0.0668 0.0460 0.0318 0.0221 0.0107 0.0037 0.1869 0.8613 0.8528 0.7284 0.7059 0.5000 0.3554 0.6717 0.4529 0.3066 35 40 Periods 1% 1 2 3 4 5 6 2% 3% TABLE 14A.2 Present Value of an Annulty of 1 Period 7 8 9 PO 35 40 4% 3% B O 5% 6% Rate 1 ♡ 6% 2% 4% 5% 10% 12% 15% 0.9901 0.9804 1.9704 1.9416 1.9135 2.9410 2.8839 2.8286 0.9709 0.9615 0.9524 0.9434 0.9346 0.9259 0.9174 0.9091 0.8929 0.8696 1.8861 1.8594 1.8334 1.8080 1.7833 1.7591 1.7355 1.6901 1.6257 2.7751 2.7232 2.6730 2.6243 2.5771 2.5313 2.4869 2.4018 2.2832 3.9020 3.8077 3.7171 3.6299 3.5460 3.4651 3.3872 3.3121 3.2397 3.1699 3.0373 2.8550 4.8534 4.7135 4.5797 4.4518 4.3295 4.2124 4.1002 3.9927 3.8897 3.7908 3.6048 3.3522 5.7955 5.6014 5.4172 5.2421 5.0757 4.9173 4.7665 4.6229 4.4859 4.3553 4.1114 3.7845 6.7282 6.4720 6.2303 6.0021 5.7864 5.5824 5.3893 5.2064 5.0330 4.8684 4.5638 4.1604 7.6517 7.3255 7.0197 6.7327 6.4632 6.2098 5.9713 5.7466 5.5348 5.3349 4.9676 4.4873 8.5660 8.1622 7.7861 7.4353 7.1078 6.8017 6.5152 6.2469 5.9952 9.4713 8.9826 8.5302 8.1109 7.7217 7.3601 7.0236 6.7101 6.4177 6.1446 5.6502 5.0188 10.3676 9.7868 9.2526 8.7605 8.3064 7.8869 7.4987 7.1390 6.8052 6.4951 5.9377 5.2337 11.2551 10.5753 9.9540 9.3851 8.8633 8.3838 7.9427 7.5361 7.1607 6.8137 6.1944 5.4206 12.1337 11.3484 10.6350 9.9856 9.3936 8.8527 8.3577 7.9038 7.4869 7.1034 6.4235 5.5831 13.0037 12.1062 11.2961 10.5631 9.8986 9.2950 8.7455 8.2442 7.7862 7.3667 6.6282 5.7245 13.8651 12.8493 11.9379 11.1184 10.3797 9.7122 9.1079 8.5595 8.0607 7.6061 6.8109 5.8474 5.7590 5.3282 4.7716 10 11 12 13 14 15 16 14.7179 13.5777 12.5611 11.6523 10.8378 10.1059 9.4466 8.8514 8.3126 7.8237 6.9740 5.9542 17 15.5623 14.2919 13.1661 12.1657 11.2741 10.4773 9.7632 9.1216 8.5436 8.0216 7.1196 6.0472 18 16.3983 14.9920 13.7535 12.6593 11.6896 10.8276 10.0591 9.3719 8.7556 8.2014 7.2497 6.1280 19 17.2260 15.6785 14.3238 13.1339 12.0853 11.1581 10.3356 9.6036 8.9501 8.3649 7.3658 6.1982 20 18.0456 16.3514 14.8775 13.5903 12.4622 11.4699 10.5940 9.8181 9.1285 8.5136 7.4694 6.2593 25 22.0232 19.5235 17.4131 15.6221 14.0939 12.7834 11.6536 10.6748 9.8226 9.0770 7.8431 6.4641 30 25.8077 22.3965 19.6004 17.2920 15.3725 13.7648 12.4090 11.2578 10.2737 9.4269 8.0552 6.5660 29.4086 24.9986 21.4872 18.6646 16.3742 14.4982 12.9477 11.6546 10.5668 9.6442 8.1755 6.6166 32.8347 27.3555 23.1148 19.7928 17.1591 15.0463 13.3317 11.9246 10.7574 9.7791 8.2438 6.6418 Rate 7% 8% ⠀ 8% 9% [1:1) 9% 1:1 89% + 95%
Transcribed Image Text:3.png TABLE 14A.1 Present Value of 1 Due in n Periods I W NOWN- 10 11 14 15 16 17 18 19 20 25 30 Periods 1% 7% 10% 12% 15% 0.9259 0.9174 0.9091 0.8929 0.8696 0.8264 0.7972 0.7561 0.7473 0.6663 0.6663 0.6302 0.5963 0:000 0.6227 0.5835 0.5470 ***** 1 0.9901 0.9804 0.9709 0.9615 0.9524 0.9434 0.9346 0.9803 0.9612 0.9426 0.9246 0.9070 0.8900 0.8900 0.8734 0.8573 0.8417 0.9706 0.9423 0.9151 0.8890 0.8638 0.8396 0.8396 0.8163 0.7938 0.7722 0.7513 0.7118 0.6575 0.9610 0.9238 0.8885 0.8548 0.8227 0.7921 0.7629 0.7350 0.7084 0.6830 0.6355 0.5718 0.9515 0.9057 0.8626 0.8219 0.7835 0.7130 0.6806 0.6499 0.6209 0.5674 0.4972 0.4972 0.9420 0.8880 0.8375 0.7903 0.7462 0.7050 0.5645 0.5066 0.4323 090 0.0000 Co 0.000000 OCCEA 0.9327 0.8706 0.8131 0.7599 0.7107 0.6651 0.5132 0.4523 0.3759 ******** M ***** ***** www.ww 0.9235 0.8535 0.7894 0.9235 0.853 0.7894 0.7307 0.6768 0.6274 0.5820 0.5403 0.5019 0.4665 0.4039 0.3269 0.6274 0.5020 0.5405 0:5019 0.4000 0.4099 0.9209 0.9143 0.8368 0.9143 0.030 0.7664 0.7026 0.6446 0.5919 0.5439 0.5002 0.4604 0.4241 0.3606 0.2843 04 0.9053 0.8203 0.7441 0.9053 0.6756 0.6139 0.5584 0.5083 0.4632 0.4224 0.3855 0.3220 0.2472 wwwwww www 0.4652 VIDELO 0.8963 0.8043 0.6043 0.7224 0.6496 0.5847 0.5268 0.4751 0.4289 0.3875 0.3505 0.2875 0.2149 12 0.8874 0.7885 0.7014 0.6246 0.5568 0.4970 0.4440 0.3971 0.3555 0.3186 0.2567 13 0.8787 0.7730 0.6810 0.6006 0.5303 0.4688 0.4150 0.3677 0.3262 0.2897 0.2292 0.1625 0.8700 0.7579 0.6611 0.6611 0.5775 0.5051 0.4423 0.3878 0.3405 0.2992 0.2633 0.2046 0.1413 0.7430 0.6419 0.5553 0.4810 04173 0.3624 0.3152 0.2745 0.2394 0.1827 0.1229 0.7284 0.6232 0.6232 0.5339 0.4581 0.3936 0.3387 0.2919 0.2519 0.2176 0.1631 0.1069 0.8444 4262 0.7142 0.6050 0.5134 0.4363 0.3714 0.3166 0.2703 0.2311 0.1978 0.1456 0.0929 2502 0.8360 0.7002 0.5874 0.4936 0.4155 0.3503 0.2959 0.2502 0.2120 0.1799 0.1300 0.0808 0.8277 0.6864 0.5703 0.4746 0.3957 0.3305 0.2765 0.2317 0.1945 0.1635 0.1161 0.0703 0.8195 0.6730 0.5537 0.4564 0.3769 0.3118 0.2584 0.2145 0.1784 0.1486 0.1037 0.0611 0.7798 0.6095 0.4776 0.3751 0.2953 0.2330 0.1842 0.1460 0.1160 0.0923 0.0588 0.0304 0.7419 0.5521 0.4120 0.3083 0.2314 0.1741 0.1314 0.0994 0.0754 0.0573 0.0334 0.0151 0.2534 0.1813 0.1301 0.0937 0.0676 0.0490 0.0356 0.0189 0.0075 0.2083 0.1420 0.0972 0.0972 0.0668 0.0460 0.0318 0.0221 0.0107 0.0037 0.1869 0.8613 0.8528 0.7284 0.7059 0.5000 0.3554 0.6717 0.4529 0.3066 35 40 Periods 1% 1 2 3 4 5 6 2% 3% TABLE 14A.2 Present Value of an Annulty of 1 Period 7 8 9 PO 35 40 4% 3% B O 5% 6% Rate 1 ♡ 6% 2% 4% 5% 10% 12% 15% 0.9901 0.9804 1.9704 1.9416 1.9135 2.9410 2.8839 2.8286 0.9709 0.9615 0.9524 0.9434 0.9346 0.9259 0.9174 0.9091 0.8929 0.8696 1.8861 1.8594 1.8334 1.8080 1.7833 1.7591 1.7355 1.6901 1.6257 2.7751 2.7232 2.6730 2.6243 2.5771 2.5313 2.4869 2.4018 2.2832 3.9020 3.8077 3.7171 3.6299 3.5460 3.4651 3.3872 3.3121 3.2397 3.1699 3.0373 2.8550 4.8534 4.7135 4.5797 4.4518 4.3295 4.2124 4.1002 3.9927 3.8897 3.7908 3.6048 3.3522 5.7955 5.6014 5.4172 5.2421 5.0757 4.9173 4.7665 4.6229 4.4859 4.3553 4.1114 3.7845 6.7282 6.4720 6.2303 6.0021 5.7864 5.5824 5.3893 5.2064 5.0330 4.8684 4.5638 4.1604 7.6517 7.3255 7.0197 6.7327 6.4632 6.2098 5.9713 5.7466 5.5348 5.3349 4.9676 4.4873 8.5660 8.1622 7.7861 7.4353 7.1078 6.8017 6.5152 6.2469 5.9952 9.4713 8.9826 8.5302 8.1109 7.7217 7.3601 7.0236 6.7101 6.4177 6.1446 5.6502 5.0188 10.3676 9.7868 9.2526 8.7605 8.3064 7.8869 7.4987 7.1390 6.8052 6.4951 5.9377 5.2337 11.2551 10.5753 9.9540 9.3851 8.8633 8.3838 7.9427 7.5361 7.1607 6.8137 6.1944 5.4206 12.1337 11.3484 10.6350 9.9856 9.3936 8.8527 8.3577 7.9038 7.4869 7.1034 6.4235 5.5831 13.0037 12.1062 11.2961 10.5631 9.8986 9.2950 8.7455 8.2442 7.7862 7.3667 6.6282 5.7245 13.8651 12.8493 11.9379 11.1184 10.3797 9.7122 9.1079 8.5595 8.0607 7.6061 6.8109 5.8474 5.7590 5.3282 4.7716 10 11 12 13 14 15 16 14.7179 13.5777 12.5611 11.6523 10.8378 10.1059 9.4466 8.8514 8.3126 7.8237 6.9740 5.9542 17 15.5623 14.2919 13.1661 12.1657 11.2741 10.4773 9.7632 9.1216 8.5436 8.0216 7.1196 6.0472 18 16.3983 14.9920 13.7535 12.6593 11.6896 10.8276 10.0591 9.3719 8.7556 8.2014 7.2497 6.1280 19 17.2260 15.6785 14.3238 13.1339 12.0853 11.1581 10.3356 9.6036 8.9501 8.3649 7.3658 6.1982 20 18.0456 16.3514 14.8775 13.5903 12.4622 11.4699 10.5940 9.8181 9.1285 8.5136 7.4694 6.2593 25 22.0232 19.5235 17.4131 15.6221 14.0939 12.7834 11.6536 10.6748 9.8226 9.0770 7.8431 6.4641 30 25.8077 22.3965 19.6004 17.2920 15.3725 13.7648 12.4090 11.2578 10.2737 9.4269 8.0552 6.5660 29.4086 24.9986 21.4872 18.6646 16.3742 14.4982 12.9477 11.6546 10.5668 9.6442 8.1755 6.6166 32.8347 27.3555 23.1148 19.7928 17.1591 15.0463 13.3317 11.9246 10.7574 9.7791 8.2438 6.6418 Rate 7% 8% ⠀ 8% 9% [1:1) 9% 1:1 89% + 95%
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