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Could I get some help on the ones I got wrong, please? Amortize Discount by Interest Method On the first day of its fiscal year,
Could I get some help on the ones I got wrong, please?
Amortize Discount by Interest Method On the first day of its fiscal year, Ebert Company issued $25,000,000 of 5-year, 8% bonds to finance its operations. Interest is payable semiannually. The bonds were issued at a market effective Interest rate of 10%, resulting in Ebert mecelving cash of $23,069,490. The company uses the interest method a. Journalize the entries to record the following: 1. Sale of the bonds. Round amounts to the nearest dollar. If an amount bax does not require an entry, leave it blank. Cash 23.069.490 Discount on Bonds Payable 1.930_510 Bonds Payable 200.000 Fondback Check My Work As the discount or premium is amortized, the carrying amount of the bond changes. As a result, Interest expense also changes each period. 2. First semiannual Interest payment, including amortization of discount. Round to the nearest dollar. If an amount bax does not require an entry, leave it blank. Interest Expense Discount on Bonds Payable Foadback Check My Work 2. Cash received for issuance x semiannual market rate x tima - Interest expense (debit). Principal x semiannual contract rate x time - cash paid (credit). The discount amortized (credit) is the difference between the two amounts. 2. Second semiannual interest payment, including amortization of discount. Round to the nearest dollar. If an amount bax does not require an entry, leave it blank. Interest Expense Discount on Bonds Payable Cash Feedback Check My Work 3. Cash received (+ discount amortized) x semiannual market rate x time - Interest expense (debit). Principal x semiannual contract rate x time - cash paid (credit). The discount amortized (credit) is the difference between the two amounts. b. Compute the amount of the bond interest expense for the first year. Round amounts to the nearest dollar Annual Interest paid Discount amortized Interest expense for first yearStep by Step Solution
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