vanhoe Corporation issued $390,000 of 5-year bonds on April 1, 2020. Interest is paid semi-annually on April 1 and October 1. Below is a partial amortization schedule for the first few years of the bond issue. Semi-Annual Interest Period Interest Payment Interest Expense Amortization Bond Amortized Cost Apr.1, 2020 $407,983 Oct. 1, 2020 $7,800 $6,120 $1,680 406,303 Apr. 1, 2021 7,800 6,095 1,705 404,598 Oct. 1, 2021 7,800 6,069 1,731 402,867 Apr. 1, 2022 7,800 6,043 1,757 401,110 Oct. 1, 2022 7,800 6,017 1,783 399,327 Apr. 1, 2023 7,800 5,990 1,810 397,517 Were the bonds issued at a discount or at a premium? The bonds were issued at a . What is the bonds’ face value? Face value $ What will the bonds’ amortized cost be at the maturity date? Bond amortized cost $ What will be the total interest payment over the five-year life of the bonds? Total interest expense? Total interest payment $ Total interest expense $ Prepare the journal entry to record the issuance of the bond. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Apr. 1, 2020 (To record issuance of bonds.) Prepare the journal entry for the first interest payment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Oct. 1, 2020 (To record interest payment.) Prepare the adjusting journal entry on December 31, 2020, assuming this is Ivanhoe’s year end. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,125.) Date Account Titles and Explanation Debit Credit Dec. 31, 2020 (To accrue interest expense.) Prepare the journal entry for the payment of interest on April 1, 2021. Assume no reversing entries have been used. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Apr. 1, 2021 (To record interest payment.)

vanhoe Corporation issued $390,000 of 5-year bonds on April 1, 2020. Interest is paid semi-annually on April 1 and October 1. Below is a partial amortization schedule for the first few years of the bond issue. Semi-Annual Interest Period Interest Payment Interest Expense Amortization Bond Amortized Cost Apr.1, 2020 $407,983 Oct. 1, 2020 $7,800 $6,120 $1,680 406,303 Apr. 1, 2021 7,800 6,095 1,705 404,598 Oct. 1, 2021 7,800 6,069 1,731 402,867 Apr. 1, 2022 7,800 6,043 1,757 401,110 Oct. 1, 2022 7,800 6,017 1,783 399,327 Apr. 1, 2023 7,800 5,990 1,810 397,517 Were the bonds issued at a discount or at a premium? The bonds were issued at a . What is the bonds’ face value? Face value $ What will the bonds’ amortized cost be at the maturity date? Bond amortized cost $ What will be the total interest payment over the five-year life of the bonds? Total interest expense? Total interest payment $ Total interest expense $ Prepare the journal entry to record the issuance of the bond. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Apr. 1, 2020 (To record issuance of bonds.) Prepare the journal entry for the first interest payment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Oct. 1, 2020 (To record interest payment.) Prepare the adjusting journal entry on December 31, 2020, assuming this is Ivanhoe’s year end. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,125.) Date Account Titles and Explanation Debit Credit Dec. 31, 2020 (To accrue interest expense.) Prepare the journal entry for the payment of interest on April 1, 2021. Assume no reversing entries have been used. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Apr. 1, 2021 (To record interest payment.)

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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Ivanhoe Corporation issued $390,000 of 5-year bonds on April 1, 2020. Interest is paid semi-annually on April 1 and October 1. Below is a partial amortization schedule for the first few years of the bond issue.

Semi-Annual Interest Period	Interest Payment	Interest Expense		Amortization	Bond Amortized Cost
Apr.1, 2020						$407,983
Oct. 1, 2020	$7,800		$6,120		$1,680	406,303
Apr. 1, 2021	7,800		6,095		1,705	404,598
Oct. 1, 2021	7,800		6,069		1,731	402,867
Apr. 1, 2022	7,800		6,043		1,757	401,110
Oct. 1, 2022	7,800		6,017		1,783	399,327
Apr. 1, 2023	7,800		5,990		1,810	397,517

Were the bonds issued at a discount or at a premium?

The bonds were issued at a .

What is the bonds’ face value?

Face value

What will the bonds’ amortized cost be at the maturity date?

Bond amortized cost

What will be the total interest payment over the five-year life of the bonds? Total interest expense?

Total interest payment		$
Total interest expense		$

Prepare the journal entry to record the issuance of the bond. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Apr. 1, 2020

	(To record issuance of bonds.)

Prepare the journal entry for the first interest payment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Oct. 1, 2020


	(To record interest payment.)

Prepare the adjusting journal entry on December 31, 2020, assuming this is Ivanhoe’s year end. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,125.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2020


	(To accrue interest expense.)

Prepare the journal entry for the payment of interest on April 1, 2021. Assume no reversing entries have been used. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Apr. 1, 2021



	(To record interest payment.)

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