Legacy issues $670,000 of 6.0%, four-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $624,896 when the market rate is 8%. Required: 1. Prepare the January 1 journal entry to record the bonds' issuance.2. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.3. Prepare an effective interest amortization table for the bonds' first two years.4. Prepare the journal entries to record the first two interest payments. Journal entry worksheet12>Record the first interest payment on June 30.Note: Enter debits before credits.DateGeneral JournalDebitCreditJune 30Record entryClear entryView general journal 1. Prepare the January 1 journal entry to record the bonds' issuance.2. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' li3. Prepare an effective interest amortization table for the bonds' first two years.4. Prepare the journal entries to record the first two interest payments.Complete this question by entering your answers in the tabs below.Required 1Required 2Required 3Required 4Prepare an effective interest amortization table for the bonds' first two years.SemiannualInterestUnamortizedDiscountCash InterestBond InterestDiscountAmortizationCarrying ValuePaidExpensePeriod-End01/01/201906/30/201912/31/201906/30/202012/31/2020< Required 2Required 4 >

Bond is a long-term liability for the company, the company can raise the money through bond in lieu…

Answered: to record the bonds' issuance. 2.…

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

Legacy issues $670,000 of 6.0%, four-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $624,896 when the market rate is 8%.

Required:

1. Prepare the January 1 journal entry to record the bonds' issuance.
2. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.
3. Prepare an effective interest amortization table for the bonds' first two years.
4. Prepare the journal entries to record the first two interest payments.

Journal entry worksheet
1
2
>
Record the first interest payment on June 30.
Note: Enter debits before credits.
Date
General Journal
Debit
Credit
June 30
Record entry
Clear entry
View general journal

1. Prepare the January 1 journal entry to record the bonds' issuance.
2. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' li
3. Prepare an effective interest amortization table for the bonds' first two years.
4. Prepare the journal entries to record the first two interest payments.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Required 3
Required 4
Prepare an effective interest amortization table for the bonds' first two years.
Semiannual
Interest
Unamortized
Discount
Cash Interest
Bond Interest
Discount
Amortization
Carrying Value
Paid
Expense
Period-End
01/01/2019
06/30/2019
12/31/2019
06/30/2020
12/31/2020
< Required 2
Required 4 >

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