70.2K

Verified Solution

Link Copied!

When Patey Pontoons issued 8% bonds on January 1, 2021, with a face amount of $700,000, the market yield for bonds of similar risk and maturity was 9%. The bonds mature December 31, 2024 (4 years). Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 4. Prepare the journal entry to record interest on June 30, 2021.

Prepare the journal entry to record interest on June 30, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round intermediate calculations and final answers to the nearest whole dollar.)

Journal entry worksheet

Record the interest expense on June 30, 2021.

Note: Enter debits before credits.

	Date General Journal Debit Credit June 30, 2021

5. What is the amount related to the bonds that Patey will report in its balance sheet at December 31, 2021?

6. What is the amount related to the bonds that Patey will report in its income statement for the year ended December 31, 2021? (Ignore income taxes.)

What is the amount(s) related to the bonds that Patey will report in its balance sheet at December 31, 2021 and income statement for the year ended December 31, 2021? (Ignore income taxes.) (Round intermediate calculations and final answers to the nearest whole dollar.)

	5. December 31, 2021 book value 6. Interest expense for 2021

7. Prepare the appropriate journal entries at maturity on December 31, 2024.

Journal entry worksheet

Record the interest expense on December 31, 2024.

Note: Enter debits before credits.

	Date General Journal Debit Credit December 31, 2024

Prepare the appropriate journal entries at maturity on December 31, 2024. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round intermediate calculations and final answers to the nearest whole dollar.)

Journal entry worksheet

Record the retirement of the bond at maturity on December 31, 2024.

Note: Enter debits before credits.

	Date General Journal Debit Credit December 31, 2024

Answer & Explanation Solved by verified expert

See Answer