80.2K

Verified Solution

Link Copied!

On January 1, 2020, Cheyenne Company sold 11% bonds having a maturity value of $500,000 for $518,953, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2020, and mature January 1, 2025, with interest payable December 31 of each year. Cheyenne Company allocates interest and unamortized discount or premium on the effective interest basis. Prepare the journal entry at the date of the bond issuance. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation January 1, 2020 Cash 518,953 Bonds Payable 500,000 Premium on Bonds Payable 18953 e Textbook and Media e Textbook List of Accounts Prepare a schedule of interest expense and bond amortization for 2020-2022. (Round answer to O decimal places, e.g. 38,548.) Schedule of Interest Expense and Bond Premium Amortization Effective-Interest Method Interest Premium Expense Amortized Cash Date Carrying Amount of Bonds Paid 1/1/20 12/31/20 55000 12/31/21 55000 12/31/22 55000 e Textbook and Media e Textbook List of Accounts Prepare the journal entry to record the interest payment and the amortization for 2020. (Round answer to O decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation December 31, 2020 51895 Premium on Bonds Payable Cash e Textbook and Media List of Accounts Prepare the journal entry to record the interest payment and the amortization for 2022. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation December 31, 2022 e Textbook and Media List of Accounts

Answer & Explanation Solved by verified expert

See Answer