Answered step by step
Verified Expert Solution
Question
1 Approved Answer
answer only Exercise 14-9 (Algo) Issuance of bonds; effective interest; amortization schedule; financial statement effects [LO14-2] When Patey Pontoons issued 4% bonds on January 1.
answer only
Exercise 14-9 (Algo) Issuance of bonds; effective interest; amortization schedule; financial statement effects [LO14-2] When Patey Pontoons issued 4% bonds on January 1. 2024, with a face amount of $580,000, the market yield for bonds of similar risk and maturity was 5\%. The bonds mature December 31,2027 (4 years). Interest is paid semiannually on June 30 and December 31 . Required: 1. Determine the price of the bonds at January 1,2024. 2. Prepare the journal entry to record their issuance by Patey on January 1,2024. 3. Prepare an amortization schedule that determines interest at the effective rate each period. 4. Prepare the journal entry to record interest on June 30,2024 . 5. What is the amount related to the bonds that Patey will report in its balance sheet at December 31,2024 ? 6. What is the amount related to the bonds that Patey will report in its income statement for the year ended December 31 , 2024? (ignore income taxes.) 7. Prepare the appropriate journal entries at maturity on December 31,2027. Note: Use tables, Excel, or a financial calculator. (EV of \$1, PV of \$1, EVA of \$1. PVA of S1. EVAD of \$1 and PVAD of \$1) Complete this question by entering your answers in the tabs below. Prepare the journal entry to record their issuance by Patey on January 1, 2024. Note: If no entry is required for a transaction/event, select "No Joumal entry required" in the first account field. Round intermediate calculations and final answers to the nearest whole dollar. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of Complete this question by entering your answers in the tabs below. Determine the price of the bonds at January 1,2024. Note: Round final answers to the nearest whole dollar. Round your percentage answer to on Prepare the journal entry to record their issuance by Patey on January 1,2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the calculations and final answers to the nearest whole dollar. Journal entry worksheet Record the issuance of the bonds on January 1,2024. Note: Enter debits before credits. Prepare an amortization schedule that determines interest at the effective rate each Note: Round intermediate calculations and final answers to the nearest whole dollar. Prepare the journal entry to record interest on June 30,2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the calculations and final answers to the nearest whole dollar. Journal entry worksheet Note: Enter debits before credits. 3. Prepare an amortization schedule that determines interest at the effective rate each period. 4. Prepare the journal entry to record interest on June 30,2024 . 5. What is the amount related to the bonds that Patey will report in its balance sheet at Decemb 6. What is the amount related to the bonds that Patey will report in its income statement for the 2024 ? (Ignore income taxes.) 7. Prepare the appropriate journal entries at maturity on December 31, 2027. Note: Use tables, Excel, or a financial calculator. (FV of $1,PV of $1, FVA of $1,PVA of $1,FVAD of 5 Complete this question by entering your answers in the tabs below. What is the amount(s) related to the bonds that Patey will report in its balance sheet at December 31,202 statement for the year ended December 31, 2024? (Ignore income taxes.) Note: Round intermediate calculations and final answers to the nearest whole dollar. Prepare the appropriate journal entries at maturity on December 31, 2027. Note: If no entry is required for a transaction/event, select "No journal entry required" in the calculations and final answers to the nearest whole dollar. Journal entry worksheet Record the interest expense on December 31,2027. Note: Enter debits before credits. Prepare the appropriate journal entries at maturity on December 31, 2027. Note: If no entry is required for a transaction/event, select "No journal entry required" in the calculations and final answers to the nearest whole dollar. Journal entry worksheet Record the retirement of the bond at maturity on December 31,2027. Note: Enter debits before credits Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started