70.2K

Verified Solution

Link Copied!

Bond Issue B

Period Ending	(A) Cash Interest Paid $500,000.0 6.0% 3/12					(B) Period Interest Expense (E) 6.5% 3/12					(C) Amort. (A) (B)					(D) Unamortized Balance					(E) Carrying Value $500,000 (D)
Apr. 1/18																	$	18,278				$	481,722
Jul. 1/18		$	7,500				$	7,828				$	328					17,950					482,050
Apr. 1/26			7,500					8,041					541					4,655					495,345
Jul. 1/26			7,500					8,049					549					4,106					495,894
Oct. 1/26			7,500					8,058					558					3,548					496,452
Jan. 1/27			7,500					8,067					567					2,981					497,019
Apr. 1/27			7,500					8,077					577					2,404					497,596
Jul. 1/27			7,500					8,086					586					1,818					498,182
Oct. 1/27			7,500					8,095					595					1,223					498,777
Jan. 1/28			7,500					8,105					605					618					499,382
Apr. 1/28			7,500					8,118	*				618					0					500,000
Totals		$	300,000				$	318,278				$	18,278

*Adjusted for rounding

2. Bond Issue B a. Were the bond B issued at a premium and/or discount?

multiple choice 2

• Issued at discount

• Issued at premium

• Issued at premium & discount

b. Journalize the issuance of bond B on April 1, 2018.

c. What is the contract interest rate for the issue bond B?

d. Interest of how much is paid how often for bond B issued?

e. What is the term of bond B issue?

f. Show how bond B would appear on the balance sheet under non-current liabilities at July 31, 2026.

g. Calculate the bond B interest expense that would appear on the income statement for the year ended July 31, 2027.

h. Independent of (a) through (g), assume that bond B issues was retired on December 1, 2027, at 97. Record the entries. 1. Record the interest paid on bonds.

2. Record the retired bonds.

Note: Enter debits before credits.

	Date General Journal Debit Credit December 01, 2027

Answer & Explanation Solved by verified expert

See Answer