Refer to the amortization schedule prepared in Exercise 14-16. Assume a November 30 year-end.

Required

Part 1

Record the following entries:

a. Issuance of the bonds on October 1, 2020

b. Adjusting entry to accrue bond interest and premium amortization on November 30, 2020

c. Payment of interest on October 1, 2021

Part 2

Show how the bond will appear on the balance sheet under non-current liabilities at November 30, 2024.

Exercise 14-16

On October 1, 2020, Ross Wind Energy Inc. issued a $1,500,000, 7%, seven-year bond. Interest is to be paid annually each October 1.

Exhibit 14.15

Transcribed Image Text:

Cash Period Carrying Value $50,000 + (D) $53,036 52,400 51,688 50,891 Premium Interest Interest Paid $50,000 x 14% Unamortized Expense Amort. Period Ending (E) x 12% (A) – (B) Premium $3,036 2,400 1,688 891 Dec. 31/20. Dec. 31/21. $ 7,000 $ 6,364' 6,2882 6,203 6,1093 $ 636 Dec. 31/22 Dec. 31/23 Dec. 31/24. Totals 712 797 891 $3,036 7,000 7,000 -0- 7,000 50,000 $28,000 $24,964