DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1,062,060.00 1 Jan. 1 Cash 2 Premium on Bonds Payable 3 Bonds Payable 4 Jun. 30 Interest Expense 19,397.00 62,060.00 1,000,000.00 5 Premium on Bonds Payable 3,103.00 6 Cash 22,500.00 7 Jul. 1 Cash 1,921,280.00 8 00 Discount on Bonds Payable 78,720.00 9 Bonds Payable 2,000,000.00 110 Oct. 1 Cash 1,100,000.00 11 Notes Payable 1,100,000.00 12 Dec. 31 Interest Expense 19,397.00 13 13 Premium on Bonds Payable 3,103.00 - 14 Cash 22,500.00 15 31 Interest Expense 16,500.00 16 Interest Payable 16,500.00 17 31 Interest Expense 41,560.00 18 Discount on Bonds Payable 6,560.00 19 19 Cash 35,000.00 20 20 31 Income Summary 96,854.00 21 Interest Expense 96,854.00 Review the journal entries on the SpringFit Corporation panel, then answer the following questions. 1. Assuming that no bonds had been issued prior to 2014, how many different bonds appear in the journal entries for this year? 2. Which entry shows bonds issued at a contract rate lower than the market rate of interest? Choose the date. 3. How much interest was paid during the year on the bonds in question (2)? $ 4. What is the carrying amount of the bonds in question (2) at the end of the year? $ 5. Which entry shows bonds that sold for more than their face amount? Choose the date. 6. How much interest was paid during the year on the bonds in question (5)? Jan. 1 $45,000 July 1 2 7. Assuming that straight-line amortization is used for the bonds in (5), what is the bond life? 8. What is the carrying value of the bonds in question (5) at the end of the year? $ 10 years 9. Considering only the 20Y4 journal entries, how much interest was probably accrued on the note payable issued during the year? $ Points: 5/9 DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Jun. 30 Interest Expense 19,397.00 2 3 4 30 5 Premium on Bonds Payable Cash Interest Expense Discount on Bonds Payable 3,103.00 22,500.00 41,560.00 6,560.00 6 Cash 35,000.00 7 30 Bonds Payable 2,000,000.00 8 Gain on Redemption of Bonds 41,000.00 9 Discount on Bonds Payable 65,600.00 10 10 Cash 1,893,400.00 11 Sep. 30 Interest Expense 49,500.00 12 Interest Payable 16,500.00 13 Notes Payable 251,451.00 14 14 Cash 317,451.00 15 Dec. 31 Interest Expense 12,728.00 16 Interest Payable 12,728.00 17 31 Interest Expense 19,397.00 - 18 Premium on Bonds Payable 3,103.00 19 Cash 22,500.00 20 31 Income Summary 142,582.00 21 Interest Expense 142,582.00 22 31 Bonds Payable 500,000.00 23 Premium on Bonds Payable 24,824.00 24 Loss on Redemption of Bonds 20,600.00 25 Cash 545,424.00 Considering the journal entries for both years, answer the following questions. 1. What is the yearly payment amount required for the note payable? (Assume it is an installment note.) $ 2. What is the interest rate on the note payable? % 3. Were the bonds in the entry on Dec. 31 of 20Y5 redeemed at maturity? 4. You suspect there is an error in one of the bond redemption entries. Assuming that the amounts are correct, which entry is questionable? 5. Why do some bonds sell below face value? Why? Points: 0/6