On January 1, 2018, Loop Raceway issued 520 bonds, each with a face value of $1,000,...

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Accounting

On January 1, 2018, Loop Raceway issued 520 bonds, each with aface value of $1,000, a stated interest rate of 5 percent paidannually on December 31, and a maturity date of December 31, 2020.On the issue date, the market interest rate was 6 percent, so thetotal proceeds from the bond issue were $506,090. Loop uses thestraight-line bond amortization method and adjusts for any roundingerrors when recording interest in the final year.
Required:
1. Prepare a bond amortization schedule.
2-5. Prepare the journal entries to record thebond issue, the interest payments on December 31, 2018 and 2019,the interest and face value payment on December 31, 2020 and thebond retirement. Assume the bonds are retired on January 1, 2020,at a price of 98.

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On January 1, 2018, Loop Raceway issued 520 bonds, each with aface value of $1,000, a stated interest rate of 5 percent paidannually on December 31, and a maturity date of December 31, 2020.On the issue date, the market interest rate was 6 percent, so thetotal proceeds from the bond issue were $506,090. Loop uses thestraight-line bond amortization method and adjusts for any roundingerrors when recording interest in the final year.Required:1. Prepare a bond amortization schedule.2-5. Prepare the journal entries to record thebond issue, the interest payments on December 31, 2018 and 2019,the interest and face value payment on December 31, 2020 and thebond retirement. Assume the bonds are retired on January 1, 2020,at a price of 98.