10B-7, 10B-8, and 10B-9

10B-7. (Similar to problem 10B-4) TONG Incorporated issues 10-year bonds with a face value of $300,000 and a stated annual interest rate of 10%, paid semi-annually. The bonds sold at a price of 89 (89% of face value). The effective annual interest rate is 12%. Required: Prepare the bond amortization table for these bonds for the first four six-month periods. 10B-8. (Similar to problem 10B-5) For the situation described in 10B-7, assume that the bonds were issued on March 1, 20x1. Required: Use the amortization table to determine the entries required to record the September 1, 20x1 interest payment, the necessary December 31, 20x1 adjusting entries, and the March 1, 20x2 interest payment. 10B-9. (Similar to problem 10B-6) For the situation described in 10B-7 and 10B-8, assume that immediately after making the March 1, 20x2 payment TONG repurchases all the bonds for $210,000. Required: Show the entry necessary to record TONG's repurchase of the bonds. Template for Problem 10B-7 Name: TA Name: Lab Section Time: Amount Owed (Beginning) Interest Expense Amount Paid Amount Owed (End) Period ** You will use the above information to complete the next two problems. If you do not do the next two problems at the same time, copy the resulting table to the next page. Problems IOB-8 and 10B-9 Name: TA Name: Lab Section Time: Problem 10B-7 - Copied from previous page Amount Owed (Beginning) Interest Expense Amount Paid Amount Owed (End) Period Problem 10B-8 and 10B-9 Cash Bonds Payable Discount on Bonds Payable Interest Payable Interest Expense