Problem 10-8AB (Static) Effective Interest: Amortization of bond discount LO P5

Legacy issues $325,000 of 5%, four-year bonds dated January 1, 2020, that pay interest semiannually on June 30 and December 31. They are issued at $292,181 when the market rate is 8%. Required: 1. Prepare the January 1 journal entry to record the bonds' issuance. 2. Complete the below table to calculate the total bond interest expense to be recognized over the bonds life. 3. Prepare an effective interest amortization table for the bonds first two years. 4. Prepare the journal entries to record the first two interest payments.

Problem 10-8AB (Static) Effective Interest: Amortization of bond discount LO P5 Legacy issues $325,000 of 5%, four-year bonds dated January 1, 2020, that pay interest semiannually on June 30 and December 31. They are issued at $292,181 when the market rate is 8%. Required: 1. Prepare the January 1 journal entry to record the bonds' issuance. 2. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 3. Prepare an effective interest amortization table for the bonds' first two years. 4. Prepare the journal entries to record the first two interest payments. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare the January 1 journal entry to record the bonds' issuance. View transaction list Journal entry worksheet 1 > Record the issue of bonds with par value of $325,000 cash on January 1, 2020 at an issue price of $ 292,181. Note: Enter debits before credits. Date General Journal Debit Credit January 01 Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. Total bond interest expense over life of bonds: Amount repaid: payments of Par value at maturity Total repaid Less amount borrowed Total bond interest expense Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare an effective interest amortization table for the bonds' first two years. (Round your intermediate and final answers to the nearest whole dollar.) Semiannual Interest Period-End Cash Interest Paid Bond Interest Expense Discount Amortization Unamortized Discount Carrying Value 01/01/2020 06/30/2020 12/31/2020 06/30/2021 12/31/2021 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare the journal entries to record the first two interest payments. View transaction list Journal entry worksheet Record the first interest payment on June 30. Note: Enter debits before credits Date General Journal Debit Credit June 30 Record entry Clear entry View general Journal