90.2K

Verified Solution

Link Copied!

On January 1, 2021, Surreal Manufacturing issued 640 bonds, each with a face value of $1.000, a stated interest rate of 3 percent paid annually on December 31, and a maturity date of December 31, 2023. On the issue date, the market interest rate was 4 percent, so the total proceeds from the bond issue were $622,242. Surreal uses the simplified effective-interest bond amortization method and adjusts for any rounding errors when recording interest in the final year. Required: 1. Prepare a bond amortization schedule. 2-5. Prepare the journal entries to record the bond issue, the interest payments on December 31, 2021 and 2022, the interest and face value payment on December 31, 2023 and the bond retirement. Assume the bonds are retired on January 1, 2023, at a price of 102. Complete this question by entering your answers in the tabs below. Reg 1 Req 2 to 5 Req 1 Req 2 to 5 Prepare a bond amortization schedule. (Do not round intermediate calculations. Round your answers to the nearest whole sure that the Carrying value equals to face value of the bond in the last period. Interest expense in the last period should b as Cash Interest (+)/(-) Increase in Bonds Payable, Net.) Changes During the Period End of Year Beginning of Year Bonds Payable, Period Interest Expense Net Cash Paid Increase in Bonds Payable, Not Bonds Payablo, Not $ 0 $ 0 01/01/21 - 12/31/21 01/01/22 - 12/31/22 0 0 01/01/23 - 12/31/23 0 0 Journal entry worksheet

Answer & Explanation Solved by verified expert

See Answer