Please include the calculations Celine Dion Company issued $924,000 of 10%, 20-y
ID: 2417747 • Letter: P
Question
Please include the calculations
Celine Dion Company issued $924,000 of 10%, 20-year bonds on January 1, 2014, at 102. Interest is payable semiannually on July 1 and January 1. Celine Dion Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of 9.7705%.
Prepare the journal entries to record the following. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No.
Account Titles and Explanation
Debit
Credit
(a) The issuance of the bonds. (b) The payment of interest and related amortization on July 1, 2014. (c) The accrual of interest and the related amortization on December 31, 2014.Explanation / Answer
Amount in $
calculation premium amortization by effective interest method:
date Account titles and explanatios Debit credit 01/01/2014 cash 942,480 bonds payable 924,000 premium on bonds 18,480 01/07/2014 Interest 46,040 premium on bonds payable 160 cash 46,200 31/12/2014 Interest 46,032 premium on bonds payable 168 cash 46,200