90.2K

Verified Solution

Link Copied!

Required information [The following information applies to the questions displayed below.] Hillside issues $2,600,000 of 5%, 15-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,182,390. Required: 1. Prepare the January 1 journal entry to record the bonds' issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line premium amortization. 2(c) For each semiannual period, complete the table below to calculate the bond interest expense. 3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 4. Prepare the first two years of a straight-line amortization table. 5. Prepare the journal entries to record the first two interest payments. Journal entry worksheet 1 Record the issue of bonds with a par value of $2,600,000 on January 1, 2021 at an issue price of $3,182,390. Note: Enter debits before credits. Date January 01 General Journal Debit Credit View general journal Record entry Clear entry Req 1 Req 2A to 2C Req 3 Req 4 Req 5 For each semiannual period, compute (a) the cash payment, (b) the straight-line premium amortization, and (c) the bond interest expense. (Round your final answers to the nearest whole dollar.) Par (maturity) value 2(a) Annual Rate Bond price Par (maturity value) 2(b) Semiannual cash payment 2(c) Premium amortization Year Premium on Bonds Payable = = Bond interest expense Semiannual cash interest payment = Semiannual periods = Straight-line premium amortization 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 0 $ 0 Semiannual Period- Unamortized End 01/01/2021 Premium Carrying Value 06/30/2021 12/31/2021 06/30/2022 12/31/2022 Journal entry worksheet 1 2 Record the first interest payment on June 30. Note: Enter debits before credits. Date June 30 General Journal Debit Credit > Journal entry worksheet < 1 2 Record the second interest payment on December 31. Note: Enter debits before credits. Date December 31 General Journal Debit Credit

Answer & Explanation Solved by verified expert

See Answer