Cap $11$

Rodgers Gridiron Co$.$ produces and sells football equipment. On July $1,20Y1,$ Rodgers issued $$72,900,000$ of $10$ year, $13\%$ bonds at a market $($effective$)$ interest rate of $11\%,$ receiving cash of $$81,611,893.$ Interest on the bonds is payable semiannually on December $31$ and June $30.$ The fiscal year of the company is the calendar year.

Required:

For all journal entries, if an amount box does not require an entry, leave it blank.

Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July $1,20Y1.$

$20Y1$ July $1$

Premium on Bonds Payable $$

Bonds Payable $$

Feedback

Check My Work

Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account.

Journalize the entries to record the following:

a$.$ The first semiannual interest payment on December $31,20$Y$1,$ and the amortization of the bond premium, using the straight$-$line method. Round to the nearest dollar.

$20Y1$ Dec. $31$ Interest Expense :

Bonds Payable $-$

Cash grad

b$.$ The interest payment on June $30,20Y2,$ and the amortization of the bond premium, using the straight$-$line method. Round to the nearest dollar.

$20Y2$ June $30$ Interest Expense $-$

Discount on Bonds Payable

Cash $-$

Determine the total interest expense for $20$Y$1.$ Round to the nearest dollar.

Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater

$2$ more Check My Work uses remaining.

Previous

Next