E10-14 (Static) (Chapter Supplement) Recording and Reporting a Bond Issued at a Premium (without Premium Account) LO10-5

Park Corporation is planning to issue bonds with a face value of $2,000,000 and a coupon rate of 10 percent. The bonds mature in 10 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Park uses the effective-interest amortization method and does not use a premium account. Assume an annual market rate of interest of 8.5 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)

Required:

1.&2. Prepare the journal entry to record the issuance of the bonds and the interest payment on June 30 of this year.

3. What bonds payable amount will Park report on its June 30 balance sheet?

Complete this question by entering your answers in the tabs below. Reg 1 and 2 Req3 Prepare the journal entry to record the issuance of the bonds and the interest payment on June 30 of this year. (If no entry is equired for a transaction/event, select "No journal entry required" in the first account field.) No Credit Date January 01 Debit 2,199,417 1 General Journal Cash Bonds payable Premium on bonds payable 2,000,000 199,416 2 June 30 Interest expense Premium on bonds payable Cash 93,475 6,525 > 100,000 Req 1 and 2 Req3 What bonds payable amount will Park report on its June 30 balance sheet? (Round your final answers to whole dollars.) PARK CORPORATION Balance Sheet (Partial) At June 30 ong-term liabilities Bonds payable $ 2,000,000 Premium on bonds ayable $ 192,891 $ 2,192,891