Patton issues $680,000 of 6.5%, four-year bonds dated January 1, 2011, that pay
ID: 2375787 • Letter: P
Question
Patton issues $680,000 of 6.5%, four-year bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31. They are issued at $645,669 and their market rate is 8% at the issue date.
Prepare the January 1, 2011, journal entry to record the bonds' issuance. (Omit the "$" sign in your response.)
Determine the total bond interest expense to be recognized over the bonds' life. (Omit the "$" sign in your response.)
Prepare a straight-line amortization table for the bonds' first two years. (Make sure that the unamortized discount is adjusted to "0" and the carrying value equals to face value of the bond in the last period. Round your intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.)
Prepare the journal entries to record the first two interest payments. (Round your intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.)
Patton issues $680,000 of 6.5%, four-year bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31. They are issued at $645,669 and their market rate is 8% at the issue date.
Explanation / Answer
3.
Prepare a straight-line amortization table for the bonds' first two years
Semiannual
Interest Period-End
Unamortized
Discount
Carrying
Value
1/01/2011
$
$
6/30/2011
12/31/2011
6/30/2012
12/31/2012
3.
Prepare a straight-line amortization table for the bonds' first two years