None Take Home PortionWishful Thinking (WT) School of Management is building a new facility on a piece of donated land. It receiveda generous cash donation from a local business to support the project, and now needs to borrow additional$10,000,000 to complete the project. Therefore WT School of Mgmt issued $10,000,000 of 6.00% 10-yearbonds. These bonds were issued on January 1, 20X1, and pay interest annually on each January 1. The bondsyield 7.00%. WT School of Mgmt incurred $600,000 in bond issue costs related to the bond sale (round up thecalculation to the nearest dollar).(a) Prepare the journal entry to record the issuance of the bonds and the related bond issue costsincurred on January 1, 20X1(b) Prepare a bond amortization schedule up to and including January 1, 20X5, using the effective interestmethodDateJan 1, X1InterestPaidInterestExpenseDisc/PremAmortizationBondCarryingValueJan 1, X2Jan 1, X3Jan 1, X4Jan 1, X52(c) Assume that on July 1, 20X4, WT School of Mgmt retires 75% of the bonds at a cost of $6,500,000 plus accruedinterest. Prepare journal entries to record this retirement (

(a) Journal Entry for Bond Issuance:1. Cash (net proceeds): $8,697,6422. Bond Issue Costs (asset…

Answered: Take Home Portion Wishful Thinking (WT)…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 8RE

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