Hillside issues $1,800,000 of 7%, 15-year bonds dated January 1,2015, that pay interest semiannually on June 30 and December 31.The bonds are issued at a price of $1,555,401.
Required: 1. Prepare the January 1, 2015, journal entry to record the bondsâissuance.
2(a) For each semiannual period, complete thetable below to calculate the cash payment.
Par (maturity) value Annual Rate Year Semiannual cash interestpayment =
2(b) For each semiannual period, complete thetable below to calculate the straight-line discountamortization.
Par (maturity) value Bonds price Discount on Bonds Payable Semiannual periods Straight-line discountamortization = =
2(c) For each semiannual period, complete thetable below to calculate the bond interest expense
Semiannual cash payment Discount amortization Bond interest expense =
3. Complete the below table to calculate the total bond interestexpense to be recognized over the bonds' life.
Total bond interest expenseover life of bonds: Amount repaid: payments of Par value at maturity Total repaid Less amount borrowed Total bond interestexpense
4 Prepare the first two years of anamortization table using the straight-line method.
Semiannual Period-End Unamortized Discount Carrying Value 01/01/2013 06/30/2013 12/31/2013 06/30/2014 12/31/2014
5 Prepare the journal entries to record thefirst two interest payments.
Hillside issues $1,800,000 of 7%, 15-year bonds dated January 1,2015, that pay interest semiannually on June 30 and December 31.The bonds are issued at a price of $1,555,401.
| Required: | |
| 1. | Prepare the January 1, 2015, journal entry to record the bondsâissuance. |
2(a) For each semiannual period, complete thetable below to calculate the cash payment.
2(b) For each semiannual period, complete thetable below to calculate the straight-line discountamortization.
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Related questions
| Hillside issues $2,200,000 of 7%, 15-year bonds dated January 1,2015, that pay interest semiannually on June 30 and December 31.The bonds are issued at a price of $1,901,046.
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Hillside issues $1,500,000 of 6%, 15-year bonds dated January 1,2013, that pay interest semiannually on June 30 and December 31.The bonds are issued at a price of $1,296,168.
1. Record the issue of bonds with a par value of $1,500,000 cashon January 1, 2013 at an issue price of $1,296,168.
2. For each semiannual period, complete the table below tocalculate the cash payment.
3. For each semiannual period, complete the table below tocalculate the straight-line discount amortization.
4. For each semiannual period, complete the table below tocalculate the bond interest expense.
5.
| Complete the below table to calculate the total bond interestexpense to be recognized over the bonds' life 6.
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