Exercise 14-9 (Algo) Issuance of bonds; effective interest; amortization schedule; financial statement effects [LO14-2] When Patey Pontoons issued 4% bonds on January 1,2021 , with a face amount of $500,000, the market yield for bonds of similar risk and maturity was 5%. The bonds mature December 31,2024 (4 years). Interest is paid semiannually on June 30 and December 31 . (FV of \$1. PV of \$1, FVA of \$1, PVA of \$1, FVAD of \$1 and PVAD of \$1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price of the bonds at January 1,2021 . 2. Prepare the journal entry to record their issuance by Patey on January 1, 2021. 3. Prepare an amortization schedule that determines interest ot the effective rate each period. 4. Prepare the journal entry to record interest on June 30,2021. 5. What is the amount related to the bonds that Patey will report in its balance sheet at December 31,2021 ? 6. What is the amount related to the bonds that Patey will report in its income statement for the year ended December 31,2021? (lgnore income taxes) 7. Prepare the appropriate journal entries at maturity on December 31,2024. Compiete this question by entering your answers in the tabs below. Determine the price of the bonds at January 1, 2021. (Round final answers to the nearest whole dollar.) Complete this question by entering your answers in the tabs below. Determine the price of the bonds at January 1,2021 . (Round final answers to the nearest whole dollar.) Prepare the journal entry to record their issuance by Patey on January 1,2021 . (If no entry is required for a transaction/event, select No journal entry required" in the first account field. Round intermediate calculations and final answers to the nearest whole dollar.) Journal entry worksheet Record the issuance of the bonds on January 1,2021. Note Enter debits before credits. Prepare an amortization schedule that determines interest at the effective rate each period. (Round intermediate calculati and final answers to the nearest whole dollar.) Prepare the journal entry to record interest on June 30,2021 . (If no entry is required for a transaction/event, seiect "No joumal entry required" in the first account field. Round intermediate calculations and final answers to the nearest whole doliar.) Journal entry worksheet Required: 1. Determine the price of the bonds at January 1,2021 . 2. Prepare the journal entry to record their issuance by Patey on January 1,2021 . 3. Prepare an amortization schedule that determines interest at the effective rate each period. 4. Prepare the journal entry to record interest on June 30,2021. 5. What is the amount related to the bonds that Patey will report inits balance sheet at December 31,2021 ? 6. What is the amount related to the bonds that Patey will report in its income statement for the year ended December 31,2021 (lgnore income taxes.) 7. Prepare the appropriate journal entries at maturity on December 31,2024. Complete this question by entering your answers in the tabs below. What is the amount(s) related to the bonds that Patey will report in its balance sheet at December 31,2021 and income statement for the year ended December 31, 2021? (Ignore income taxes.) (Round intermediate calculations and final answers to the nearest whole dollar.) Prepare the appropriate journal entries at maturity on December 31, 2024. (If no entry is required for a transaction/event, select "No Journal entry required" in the first account field. Round intermediate calculations and final answers to the nearest whole dollar.) Journal entry worksheet PV=(1+i)n51 ABLE 3 Future Value of an Ordinary Annuity of $1 mus(1+i)n1 TABLE 4 Present Value of an Ordinary Annuity of $1 PVA=1(i+021 TABMIIS Futume Vakeg of an Annuity Due of 51 FVAD=[1(1+i)41](1+i) LE 6 Present Value of an Annuity Due of \$1. PVAD=[11(i+)21](1+9)
