Shunda Corporation wholesales parts to appliance manufacturers. On January 1, Shunda issued $30,000,000 of five-year, 10% bonds at a market (effective) interest rate of 8%, receiving cash of $32,433,150. Interest is payable semiannually. Shunda’s fiscal year begins on January 1. The company uses the interest method. a. Journalize the entries to record the following: 1. Sale of the bonds. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Cash fill in the blank f63d02049fd306d_2 fill in the blank f63d02049fd306d_3 Premium on Bonds Payable fill in the blank f63d02049fd306d_5 fill in the blank f63d02049fd306d_6 Bonds Payable fill in the blank f63d02049fd306d_8 fill in the blank f63d02049fd306d_9 2. First semiannual interest payment, including amortization of premium. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Interest Expense fill in the blank b527c406400bfff_2 fill in the blank b527c406400bfff_3 Premium on Bonds Payable fill in the blank b527c406400bfff_5 fill in the blank b527c406400bfff_6 Cash fill in the blank b527c406400bfff_8 fill in the blank b527c406400bfff_9 Feedback 3. Second semiannual interest payment, including amortization of premium. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Interest Expense fill in the blank ff23b1fea07e04b_2 fill in the blank ff23b1fea07e04b_3 Premium on Bonds Payable fill in the blank ff23b1fea07e04b_5 fill in the blank ff23b1fea07e04b_6 Cash fill in the blank ff23b1fea07e04b_8 fill in the blank ff23b1fea07e04b_9 b. Determine the bond interest expense for the first year. Round to the nearest dollar. Annual interest paid $fill in the blank 0048c3fabfd4fe6_1 Less premium amortized fill in the blank 0048c3fabfd4fe6_2 Interest expense for first year $fill in the blank 0048c3fabfd4fe6_3

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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Shunda Corporation wholesales parts to appliance manufacturers. On January 1, Shunda issued $30,000,000 of five-year, 10% bonds at a market (effective) interest rate of 8%, receiving cash of $32,433,150. Interest is payable semiannually. Shunda’s fiscal year begins on January 1. The company uses the interest method.

a. Journalize the entries to record the following:

1. Sale of the bonds. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.

Cash	fill in the blank f63d02049fd306d_2	fill in the blank f63d02049fd306d_3
Premium on Bonds Payable	fill in the blank f63d02049fd306d_5	fill in the blank f63d02049fd306d_6
Bonds Payable	fill in the blank f63d02049fd306d_8	fill in the blank f63d02049fd306d_9

2. First semiannual interest payment, including amortization of premium. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.

Interest Expense	fill in the blank b527c406400bfff_2	fill in the blank b527c406400bfff_3
Premium on Bonds Payable	fill in the blank b527c406400bfff_5	fill in the blank b527c406400bfff_6
Cash	fill in the blank b527c406400bfff_8	fill in the blank b527c406400bfff_9

Feedback

3. Second semiannual interest payment, including amortization of premium. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.

Interest Expense	fill in the blank ff23b1fea07e04b_2	fill in the blank ff23b1fea07e04b_3
Premium on Bonds Payable	fill in the blank ff23b1fea07e04b_5	fill in the blank ff23b1fea07e04b_6
Cash	fill in the blank ff23b1fea07e04b_8	fill in the blank ff23b1fea07e04b_9

b. Determine the bond interest expense for the first year. Round to the nearest dollar.

Annual interest paid	$fill in the blank 0048c3fabfd4fe6_1
Less premium amortized	fill in the blank 0048c3fabfd4fe6_2
Interest expense for first year	$fill in the blank 0048c3fabfd4fe6_3

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