Question
Calming, Inc. is authorized to issue 5%, 10-year bonds payable. On January 1, 2018,when the market interest rate is 8%, the company issues $500,000 of
Calming, Inc. is authorized to issue 5%, 10-year bonds payable. On January 1, 2018,when the market interest rate is 8%, the company issues $500,000 of the bonds. The bonds pay interest semiannually.
Requirement 1. How much cash did the company receive upon issuance of the bonds payable?
Requirement 2. Prepare an amortization table for the bond using the effective-interest method, through the first two interest payments. (Round to the nearest dollar.)
Requirement 3. Journalize the issuance of the bonds on January 1, 2018, and the first and second payments of the semiannual interest amount and amortization of the bonds on June 30, 2018 and December 31, 2018. Explanations are not required. (Record debits first, then credits. Exclude explanations from any journal entries.)
Journalize the issuance of the bonds.
Journalize the payment of the first semiannual interest amount and amortization of the bond on June 30, 2018.
Journalize the payment of the second semiannual interest amount and amortization of the bond on December 31, 2018.
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