Chapter 14, Problem 4BP

1.

To determine

Prepare the journal entry to record issuance of bonds payable at discount on January 1, 2019.

2.

To determine

Calculate the total bond interest expense that will be recognized over the life of the bonds.

3.

To determine

Prepare an amortization table for the first two years of the bonds using straight-line method to amortize the discount.

4.

To determine

Prepare the journal entry to record semi-annual interest and amortization of discount on bonds.

5.

To determine

Explain the changes on the amounts reported on the financial statements assuming the market rate on January 1 as 4% instead of 8%.