Question
Hillside issues $2,000,000 of 6%, 15-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. The bonds are issued
Hillside issues $2,000,000 of 6%, 15-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,728,224. Required: 1. Prepare the January 1 journal entry to record the bonds issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization. 2(c) For each semiannual period, complete the table below to calculate the bond interest expense. 3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 4. Prepare the first two years of a straight-line amortization table. 5. Prepare the journal entries to record the first two interest payments.
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Juurlidl eritry Workstieel Record the issue of bonds with a par value of $2,000,000 cash on January 1, 2019 at an issue price of $1,728,224. Note: Enter debits before credits. Date General Journal Debit Credit January 01 For each semiannual period, compute (a) the cash payment, (b) the straight-line discount amortization, and (c) the bond interest expens 2(a) Par (maturity) value Annual Rate Year Semiannual cash interest payment 2(b) Par (maturity) value Bonds price Discount on Bonds Payable Semiannual periods Straight-line discount amortization 2(c) Semiannual cash payment Discount amortization Bond interest expense Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. Total bond interest expense over life of bonds: Amount repaid: payments of Par value at maturity Total repaid Less amount borrowed Total bond interest expense Prepare the first two years of a straight-line amortization table. Carrying Value Semiannual Period- Unamortized End Discount 01/01/2019 06/30/2019 12/31/2019 06/30/2020 12/31/2020 Journal entry worksheet Record the first interest payment on June 30. Note: Enter debits before credits. Date General Journal Debit Credit June 30 Journal entry worksheet Record the second interest payment on December 31. Note: Enter debits before credits. Date General Journal Debit Debit Credit December 31Step by Step Solution
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