Question

Heathrow issues $2,200,000 of 7%, 15-year bonds dated January 1,2011, that pay interest semiannually on June 30 and December 31.The bonds are issued at a price of $2,692,790.

Required:
1.	Prepare the January 1, 2011, journal entry to record thebonds%u2019 issuance. (Omit the "$" sign in your response.)

Date	General Journal	Debit	Credit
Jan. 1	(Click to select)Discount on bonds payableBond interestexpenseAccounts receivableBond interest payableAccountspayablePremium on bonds payableBonds payableCash
	(Click to select)AccountsreceivablePremium on bonds payableBond interest payableAccountspayableBonds payableCashBond interest expenseDiscount on bondspayable
	(Click to select)Premiumon bonds payableCashAccounts payableBond interest expenseBondinterest payableDiscount on bonds payableBonds payableAccountsreceivable

2(a)	For each semiannual period, compute the cash payment. (Omit the "$" sign inyour response.)

Cash payment

$

2(b)	For each semiannual period, compute the the straight-line premiumamortization. (Round your answer tothe nearest dollar amount. Omit the "$" sign inyour response.)

Amount of premium amortized

$

2(c)	For each semiannual period, compute the the bond interest expense.(Omit the "$" sign inyour response.)

Bond interest expense

$

3.	Determine the total bond interest expense to be recognized over thebonds' life. (Omit the "$" sign in yourresponse.)

Total bond interest expense

$

4.	Prepare the first two years of an amortization table using thestraight-line method. (Omit the "$" sign in yourresponse.)

Semiannual Period-End	Unamortized Premium	Carrying Value
1/01/2011	$	$
6/30/2011
12/31/2011
6/30/2012
12/31/2012

5.	Prepare the journal entries to record the first two interestpayments. (Omit the "$" sign in yourresponse.)

Date	General Journal	Debit	Credit
June 30	(Click to select)Premium on bonds payableBond interestpayableDiscount on bonds payableBonds payableBond interestexpenseCashAccounts receivableAccounts payable
	(Click to select)Accounts payablePremium on bondspayableCashDiscount on bonds payableBonds payableBond interestexpenseAccounts receivableBond interest payable
	(Click to select)AccountspayableCashBond interest expenseAccounts receivablePremium on bondspayableBonds payableDiscount on bonds payableBond interestpayable
Dec. 31	(Click to select)Bond interest expenseAccountsreceivableDiscount on bonds payablePremium on bonds payableCashBondinterest payableAccounts payableBonds payable
	(Click to select)Premium on bonds payableAccountsreceivableBond interest payableAccounts payableDiscount on bondspayableBond interest expenseBondspayableCash
	(Click to select)AccountsreceivableAccounts payableDiscount on bonds payableCashBondinterest expenseBond interest payablePremium on bonds payableBondspayable