Hambelton Ltd, issued $3,800,000 of 5% bonds payable on 1 September 20X9 to yield 4%. Interest on the bonds is paid semi-annually and is payable each 28 February and 31 August. The bonds were dated 1 March 20x8, and had an original term of five years. The accounting period ends on 31 December . The effective interest method is used. (PV of $1. PVA of 51. and PVAD :S1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price at which the bonds were issued. (Round time volue factor to 5 decimal places. Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.) Answer is complete but not entirely correct. Price of S 3,970 525 Bond 2. Prepare a bond amortization table for the life of the bond. (Round time value factor to 5 decimal places. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Leave no cells blank - be certain to enter "0" wherever required.) Answer is complete but not entirely correct. Date Opening 1 2 3 Interest Interest Premium Unamortized Net Bond Payment Expense Amortization Premium Liability $ 170,525 $ 3,970 525 $ 95.000 $ 79.410 X $ 15,590 154.935 3,954.935 95.000 79.099 X 15,901 139.0343 3,939,034 95 000 78 781 16 219 % 122 815 X 3,922 815 X 95 000 78 456 16,544 106271 3 906 271 95.000 78. 125 10,875 89,396 % 3,889 396 % 95.000 77788 17 212 72,184 3,872 184 % 95.000 77.444 17 556 54 628 % 3,854 628 4 5 7 3.Prepare journal entries to record the issuance of the bonds, payment of Interest, and all necessary adjustments through to the end of 20X10. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Round your answers to the nearest whole dollar amount.) Answer is not complete. No Credit 1 Dato General Journal 1 September 20X Cash Premium on bonds payable Bonds payable Debit 3070,525 1705253 3.800.000 2 31 December 20% interest expense Premium on bonds payable Cash 30 79 410 3 15,500 95,000 28 February 20x Interest expense Premium on bonds payable Cash 79 410 15590 3 95.000 4 3 August 20X10 Interest expense Premium on bonds payable 79.099 X 15,901 Premium on bonds payable Bonds payable 170,525 3,800,000 2. 31 December 20% Interest expense Premium on bonds payable Cash 79,410 % 15,590 95,000 3 28 February 20X Interest expense Premium on bonds payable Cash 79,410 X 15,590 95,000 4 31 August 20X10 Interest expense Premium on bonds payable Cash 79,099 % 15 901 95,000 31 December 20% Interest expense Premium on bonds payable Accrued interest payable 52,520 % 10.813 X CS 63,333 4. Calculate the interest expense that would be recorded in each of 20x9 and 20x10. (Do not round Intermediate calculations. Round your final answers to the nearest whole dollar amount.) 3 Answer is complete but not entirely correct. 20x9 20X10 Interest $ 52,040 X 5 3.928.537 expense 5. Show how the bond would be presented on the statement of financial position as of 31 December 20X9 and 20X10. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) Answer is complete but not entirely correct. HAMBELTON LIMITED Statement of Financial Position (Partial) As of 31 December 20X9 20X10 Bands payable $ 3.960 132S 3.928.537% Premium on bond 160,132 128 5378 payablo S 4.120.254 $ 4,057074
