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(25 pts) Lopez Plastics Co. (LPC) issued $200,000 of 10% callable bonds on January 1, 2021, dated January 1, 2021 and due on January 1,
(25 pts) Lopez Plastics Co. (LPC) issued $200,000 of 10% callable bonds on January 1, 2021, dated January 1, 2021 and due on January 1, 2026. The interest is to be paid twice a year on January 1 and July 1. The bonds were sold to yield 8% effective annual interest. LPC incurred $5,000 in bond issue costs. LPC closes its books annually on December 31. Present value of a single sum for 5 periods Present value of a single sum for 10 periods Present value of an annuity for 5 periods Present value of an annuity for 10 periods Instructions (a) Complete the following amortization schedule for the dates indicated. (Round all answers to the nearest dollar.) Use the effective-interest method. Credit Cash Interest Expense Amortization Carrying Amount 1/1/21 6/30/21 12/31/21 6/30/22 12/31/22 4% 5% 8% 10% .62092 .68058 .82193 .67556 .78353 .61391 4.45182 4.32948 3.99271 .46319 .38554 3.79079 8.11090 7.72173 6.71008 6.14457 (b) Prepare the journal entry for bond issuance. (c) Prepare the adjusting entry for December 31, 2021. Lopez Plasties Co. (LPC) issued $200,000 of 10% callable bonds on January 1, 2021, dated January 1, 2021 and due on January 1,2026. The interest is to be paid twice a year on January 1 and July 1 . The bonds were sold to yield 8% effective annual interest. LPC incurred $5,000 in bond issue costs. LPC closes its books annually on December 31 . Instructions (a) Complete the following amortization schedule for the dates indicated. (Round all answers to the nearest dollar.) Use the effective-interest method. (b) Prepare the journal entry for bond issuance. (c) Prepare the adjusting entry for December 31, 2021
(25 pts) Lopez Plastics Co. (LPC) issued $200,000 of 10% callable bonds on January 1, 2021, dated January 1, 2021 and due on January 1, 2026. The interest is to be paid twice a year on January 1 and July 1. The bonds were sold to yield 8% effective annual interest. LPC incurred $5,000 in bond issue costs. LPC closes its books annually on December 31. Present value of a single sum for 5 periods Present value of a single sum for 10 periods Present value of an annuity for 5 periods Present value of an annuity for 10 periods Instructions (a) Complete the following amortization schedule for the dates indicated. (Round all answers to the nearest dollar.) Use the effective-interest method. Credit Cash Interest Expense Amortization Carrying Amount 1/1/21 6/30/21 12/31/21 6/30/22 12/31/22 4% 5% 8% 10% .62092 .68058 .82193 .67556 .78353 .61391 4.45182 4.32948 3.99271 .46319 .38554 3.79079 8.11090 7.72173 6.71008 6.14457 (b) Prepare the journal entry for bond issuance. (c) Prepare the adjusting entry for December 31, 2021.
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