Saved Help On September 1, 2021, Evansville Lumber Company issued $80 million in 20-year, 10 percent bonds payable. Interest is payable semiannually on March 1 and September 1. Bond discounts and premiums are amortized at each interest payment date and at year- end. The company's fiscal year ends at December 31. Required: a-1. Prepare the necessary adjusting entries at December 31, 2021, and the journal entry to record the payment of bond interest on March 1, 2022, under the assumption that the bonds were issued at 98. a-2. Prepare the necessary adjusting entries at December 31, 2021, and the journal entry to record the payment of bond interest on March 1, 2022, under the assumption that the bonds were issued at 101. b. Compute the net bond liability at December 31, 2022, under assumptions a-1 and a-2 above. c. Under which of the following assumptions would the investor's effective rate of interest be higher? 1. The bonds were issued at 98. 2. The bonds were issued at 101. Complete this question by entering your answers in the tabs below. Reg A1 Reg A2 Reg B Req C Prepare the necessary adjusting entries at December 31, 2021, and the journal entry to record the payment of bond interest on March 1, 2022, under the assumption that the bonds were issued at 98. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest dollar amount. Enter you answers in dollars not millions.) View transaction list Journal entry worksheet <> Record the accrual of bond interest expense for four months in 2021. Note: Enter debits before credits. General Journal Dehit Credis Date < Prev 6 of 6 Next
Saved Help On September 1, 2021, Evansville Lumber Company issued $80 million in 20-year, 10 percent bonds payable. Interest is payable semiannually on March 1 and September 1. Bond discounts and premiums are amortized at each interest payment date and at year- end. The company's fiscal year ends at December 31. Required: a-1. Prepare the necessary adjusting entries at December 31, 2021, and the journal entry to record the payment of bond interest on March 1, 2022, under the assumption that the bonds were issued at 98. a-2. Prepare the necessary adjusting entries at December 31, 2021, and the journal entry to record the payment of bond interest on March 1, 2022, under the assumption that the bonds were issued at 101. b. Compute the net bond liability at December 31, 2022, under assumptions a-1 and a-2 above. c. Under which of the following assumptions would the investor's effective rate of interest be higher? 1. The bonds were issued at 98. 2. The bonds were issued at 101. Complete this question by entering your answers in the tabs below. Reg A1 Reg A2 Reg B Req C Prepare the necessary adjusting entries at December 31, 2021, and the journal entry to record the payment of bond interest on March 1, 2022, under the assumption that the bonds were issued at 98. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest dollar amount. Enter you answers in dollars not millions.) View transaction list Journal entry worksheet <> Record the accrual of bond interest expense for four months in 2021. Note: Enter debits before credits. General Journal Dehit Credis Date < Prev 6 of 6 Next
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
ACCT 102 - Please do subparts A1 and A2 ONLY.
A1 is two steps, first "record the accrual of bond interest expense for 4 months in 2021" A2 starts off exactly like this as well.
However the second step of A1 is to "Record semiannual bond interest payment and interest expense for two months."
A2 says "Record payment of bond interest on March 1st, 2022, under assumption bonds were issued at 101."
ALL QUESTIONS MUST BE ANSWERED USING GENERAL JOURNAL
Transcribed Image Text:Saved
Help
On September 1, 2021, Evansville Lumber Company issued $80 million in 20-year, 10 percent bonds payable. Interest is payable
semiannually on March 1 and September 1. Bond discounts and premiums are amortized at each interest payment date and at year-
end. The company's fiscal year ends at December 31.
Required:
a-1. Prepare the necessary adjusting entries at December 31, 2021, and the journal entry to record the payment of bond interest on
March 1, 2022, under the assumption that the bonds were issued at 98.
a-2. Prepare the necessary adjusting entries at December 31, 2021, and the journal entry to record the payment of bond interest on
March 1, 2022, under the assumption that the bonds were issued at 101.
b. Compute the net bond liability at December 31, 2022, under assumptions a-1 and a-2 above.
c. Under which of the following assumptions would the investor's effective rate of interest be higher?
1. The bonds were issued at 98.
2. The bonds were issued at 101.
Complete this question by entering your answers in the tabs below.
Req A1
Req A2
Req B
Req C
Prepare the necessary adjusting entries at December 31, 2021, and the journal entry to record the payment of bond interest on March 1,
2022, under the assumption that the bonds were issued at 98. (If no entry is required for a transaction/event, select "No journal entry
required" in the first account field. Round your answers to the nearest dollar amount. Enter you answers in dollars not millions.)
View transaction list
Journal entry worksheet
Record the accrual of bond interest expense for four months in 2021.
Note: Enter debits before credits.
Date
General Jonurnal
Credit
Debit
<Prev
6 of 6
Next
Transcribed Image Text:Prepare the necessary adjusting entries at December 31, 2021, and the journal entry to record the payment of bond interest on March
2022, under the assumption that the bonds were issued at 98. (If no entry is required for a transaction/event, select "No journal entry
required" in the first account field. Round your answers to the nearest dollar amount. Enter you answers in dollars not millions.)
View transaction list
Journal entry worksheet
く
1
<>
Record the accrual of bond interest expense for four months in 2021.
Note: Enter debits before credits.
Debit
Credit
Date
General Journal
Dec 31, 2021
View general journal
Clear entry
Record entry
Rea 42
2.
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