The following amortization and interest schedule reflects the issuance of 10-year bonds by Cullumber Corporation on January 1, 2014, and the subsequent interest payments and charges. The company’s year-end is December 31, and financial statements are prepared once yearly.Amortization ScheduleYear Cash Interest AmountUnamortized CarryingValue1/1/2014 $28,507 $ 113,4932014 $15,620 $17,024 27,103 114,8972015 15,620 17,235 25,488 116,5122016 15,620 17,477 23,631 118,3692017 15,620 17,755 21,496 120,5042018 15,620 18,076 19,040 122,9602019 15,620 18,444 16,216 125,7842020 15,620 18,868 12,968 129,0322021 15,620 19,355 9,233 132,7672022 15,620 19,915 4,938 137,0622023 15,620 20,558 142,000(e) On the basis of the schedule above, prepare the journal entry to reflect the bond transactions and accruals for 2014. (Interest is paid January 1.)

Answered: The following amortization and interest…

Principles of Accounting Volume 1

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ISBN:9781947172685

Author:OpenStax

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Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 14MC: Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the...

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The following amortization and interest schedule reflects the issuance of 10-year bonds by Cullumber Corporation on January 1, 2014, and the subsequent interest payments and charges. The company’s year-end is December 31, and financial statements are prepared once yearly.

Amortization Schedule
Year	Cash	Interest	Amount Unamortized	Carrying Value
1/1/2014			$28,507	$ 113,493
2014	$15,620	$17,024	27,103	114,897
2015	15,620	17,235	25,488	116,512
2016	15,620	17,477	23,631	118,369
2017	15,620	17,755	21,496	120,504
2018	15,620	18,076	19,040	122,960
2019	15,620	18,444	16,216	125,784
2020	15,620	18,868	12,968	129,032
2021	15,620	19,355	9,233	132,767
2022	15,620	19,915	4,938	137,062
2023	15,620	20,558		142,000

(e) On the basis of the schedule above, prepare the journal entry to reflect the bond transactions and accruals for 2014. (Interest is paid January 1.)

Expert Solution

Explanation -

Bonds Payable -

Bonds is an promissory notes that the issuer paid along with interest on maturity.

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