CSecure https//newconnect.mheducation htm Chapter 10 Homework 5 Hillside issues
ID: 2335131 • Letter: C
Question
CSecure https//newconnect.mheducation htm Chapter 10 Homework 5 Hillside issues $1,900,000 of 5%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31 The bonds are Issued at a price of $1,641812 Required: 1. Prepare the January 1, 2017, journal entry to record the bonds' issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment 2/b) For each semiannual period, complete the table below to calculate the straight-line discount amortization. 2(c) For each semiannual period, complete the table below to calculate the bond interest expense 3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 4. Prepare the first two years of an amortization table using the straight-line method. points eBook Print References5. Prepare the journal entries to record the first two interest payments. Complete this question by entering your answers in the tabs below Req 1 Req 2A to 2CReq 3 Req 4 Req 5 Prepare the January 1, 2017, journal entry to record the bonds' issuance View transaction list Journal entry worksheet Record the issue of bonds with a par value of $1,900,000 cash on January 1, 2017 at an issue price of $1,641,812. pe here to searchExplanation / Answer
1 Date General Journal Debit Credit 1-Jan-17 Cash 1,641,812 Discount on bonds payable 258,188 Bonds payable 1,900,000 2a Par (maturity) value Annual Rate Year Semiannual cash interest payment $1,900,000 x 5% x 6/12 = $47,500 b Par (maturity) value Bonds price Discount on Bonds Payable Semiannual periods Straight-line discount amortization $1,900,000 - $1,641,812 = $258,188 ÷ 30 = $8,606 c Semiannual cash payment Discount amortization Bond interest expense $47,500 + $8,606 = $56,106 3 Total bond interest expense over life of bonds: Amount repaid: 30 payments of $47,500 1425000 Par value at maturity 1,900,000 Total repaid 3325000 Less amount borrowed 1,641,812 Total bond interest expense 1,683,188 4 Semiannual Period-End Unamortized Discount Carrying Value 1/1/2017 $258,188 $1,641,812 6/30/2017 249,582 $1,650,418 12/31/2017 240,976 $1,659,024 6/30/2018 232,370 $1,667,630 12/31/2018 223,764 $1,676,236 Date General Journal Debit Credit 30-Jun-17 Bond interest expense 56,106 Discount on bonds payable 8,606 Cash 47,500 31-Dec-17 Bond interest expense 56,106 Discount on bonds payable 8,606 Cash 47,500