Question A. (30 points) Clean Air Manufacturing on January 1, 2012 issued a $ 10
ID: 2543435 • Letter: Q
Question
Question A. (30 points) Clean Air Manufacturing on January 1, 2012 issued a $ 100,000 bonds payable for $ 86, 200. The company uses the effective-Interest Method for amortization of the bond. Below is a partial amortization schedule. The periods below are for 3 years Interest is paid annually on January 1s Instructions: Journalize the following: (o) Isuance of bonds on Jamuary 1, 2012 (b) Accrual of bond interest on December 31, 2012 (c) Payment of the interest on January 1, 2013 (c). Redemption of bonds on maturity date assuming all interest has been paid. Interest To Be Paid 10%x1 00,0001 Recorded Interest Expense To Be Discount Unamortized Bond Amortization Disacount Carrying Interest Periods Value 13% Times Preceeding Bond carrying Value Issue Date Yearl.2012 Year2.2013 ear3.2014 Prepate the amotiatioh schedaLe for th e first 3 years: 2012, 20 13, 2o I4Explanation / Answer
Part B :
Date Accounts title Dr. Cr. October 1 ,2016 Cash [150000*$22] $3300000 To Common stock [150000*$16] $2400000 To Additional paid in capital [150000*$6] $900000 [Being common stock issued at premium] October 5,2016 legal service charge $46000 To Common stock [2000 * $16] $32000 To Additional paid in capital [2000*$7] $14000 [Being common stock issued for the services received]