Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

can you help me please On January 1, 2018, Surreal Manufacturing Issued 540 bonds, each with a face value of $1,000, a stated interest rate

image text in transcribed
image text in transcribed
can you help me please
On January 1, 2018, Surreal Manufacturing Issued 540 bonds, each with a face value of $1,000, a stated interest rate of 3 percent pald annually on December 31, and a maturity date of December 31, 2020. On the issue date, the market Interest rate was 4 percent, so the total proceeds from the bond issue were $525.017. Surreal uses the simplified effective-Interest bond amortization method and adjusts for any rounding errors when recording Interest in the final year. Required: 1. Prepare a bond amortization schedule. 2.5. Prepare the journal entries to record the bond issue, the interest payments on December 31, 2018 and 2019, the Interest and face value payment on December 31, 2020 and the bond retirement. Assume the bonds are retired on January 1, 2020, at a price of 102 Answer is not complete Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 to 5 Prepare a bond amortization schedule. (Do not round intermediate calculations. Round your answers to the nearest whole dollar. Make sure that the Carrying value equals to face value of the bond in the last period. Interest expense in the last period should be calculated as Cash Interest (+)/(-) Reduction in Bonds Payable, Net.) End of Year Period Beginning of Year Bonds Payable. Net 5525.017S Changes During the Period Interest Increase in Cash Paid Bonds Payable Expense Net 21.001s 16.2003 4,801 21,193 18.200 4,993 Bonds Payable, Net IS 529.818 010118 - 12/3118 01/01/10 - 12/31/19 01/0120 12/31/20 529,818 534811 534.810 21.389 10.200 5,189 539,999 No Date General Journal Debit Credit Jan 01, 2018 Cash Discount on Bonds Payable Bonds Payable, Net 525,017 14,983 X x 540,000 2 Dec 31, 2018 21,001 Interest Expense Cash Discount on Bonds Payable 16,200 4.801 3 Dec 31, 2019 21,193 Interest Expense Cash Discount on Bonds Payable XO 16,200 4,993 Dec 31, 2020 21,389 540,000 $ Interest Expense Bonds Payable, Net Cash Discount on Bonds Payable 558.200 5.189 XO XOOO 5 Jan 01, 2020 640,000 15,989 Bonds Payable, Net Loss on Bond Retirement Cash Discount on Bonds Payable 550.800 5.189

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Theory

Authors: Craig Deegan, H. Bierman

4th Edition

0071013148, 978-0071013147

More Books

Students also viewed these Accounting questions

Question

Describe ERP and how it can create efficiency within a business

Answered: 1 week ago

Question

Who do you know that is a member of a microcultural group?

Answered: 1 week ago