Chapter 14, Problem 14.4P

a.

To determine

Concept Introduction:

Zero Coupon Bond: Zero Coupon bonds are bonds on which cash interest is not paid because stated interest is zero. However, the holder will receive the face value at maturity. Zero-coupon bonds are typically issued at significant discounts because the market rate is always higher than the rate of zero-coupon bonds.

The issue price of the bond.

b.

To determine

Concept Introduction:

Amortization: Amortization refers to the method of accounting which lower the booking amount or book value of any loan or any intangible asset over a time period.

To prepare: The amortization table for the bond issue.

c.

To determine

Concept Introduction:

Journalizing: In accounts, for keeping records of all the business transactions properly, journalizing is being done for the transactions. Thus, it helps to track the transactions in chronological order as well as to maintain the records too.

To prepare: The journal for recording issuing the bond and the entry as of 31^st December 2022.

d.

To determine

Concept Introduction:

Amortization: Amortization refers to the method of accounting which lower the booking amount or book value of any loan or any intangible asset over the period.

The effects of the bond issue and the amortization of discount in the income statement, cash flow statement, and balance sheet of the year 2022.

e.

To determine

Concept Introduction:

Journalizing: In accounts, for keeping records of all the business transactions properly, journalizing is being done for the transactions. Thus, it helps to track the transactions in chronological order as well as to maintain the records too.

To prepare: The journal for recording early retirement of bond on November 30, 2023.