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I need help with bond amortization schedule and the journal entires with red x On January 1, 2018, Surreal Manufacturing issued 540 bonds, each with
I need help with bond amortization schedule and the journal entires with red x
On January 1, 2018, Surreal Manufacturing issued 540 bonds, each with a face value of $1,000, a stated interest rate of 3 percent paid annually on December 31, and a maturity date of December 31, 2020. On the issue date, the market interest rate was 4 percent, so the total proceeds from the bond issue were $525,017. Surreal uses the simplified effective-interest bond amortization method and adjusts for any rounding errors when recording interest in the final year. Required: 1. Prepare a bond amortization schedule. 2-5. Prepare the journal entries to record the bond issue, the interest payments on December 31, 2018 and 2019, the interest and face value payment on December 31, 2020 and the bond retirement. Assume the bonds are retired on January 1, 2020, at a price of 102. X Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 5 Prepare a bond amortization schedule. (Do not round intermediate calculations. Round your answers to the nearest whole dollar. Make sure that the Carrying value equals to face value of the bond in the last period. Interest expense in the last period should be calculated as Cash Interest (+)/(-) Reduction in Bonds Payable, Net.) Beginning of Year Changes During the Period End of Year Bonds Interest Increase in Bonds Bonds Period Payable, Net Cash Paid Expense Payable, Net Payable, Net 01/01/18 - $ 540,000 X $ 544,801 21,001 16,200 4,801 12/31/18 01/01/19 - 12/31/19 540,000 X 21,001 X 16,200 4,801 544,801 01/01/20 - 540,000 X 21,001 ( 4,801 16,200 544,801 12/31/20 Req 1 Req 2 to 5 X Answer is not complete. Complete this question by entering your answers in the tabs below. Req 2 to 5 Req 1 Prepare the journal entries to record the bond issue, the interest payments on December 31, 2018 and 2019, the interest and face value payment on December 31, 2020 and the bond retirement. Assume the bonds are retired on January 1, 2020, at a price of 102. (Do not round intermediate calculations. 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.) Show less A: No Date General Journal Debit Credit Jan 01, 2018 Cash 525,017 Discount on Bonds Payable 14,983 X X, 540,000 Bonds Payable, Net Interest Expense Dec 31, 2018 21,001 Discount on Bonds Payable 4,801 Cash 16,200 Interest Expense 3 Dec 31, 2019 21,193 Discount on Bonds Payable 4,993 Cash 16,200 Interest Expense 4 Dec 31, 2020 21,389 Discount on Bonds Payable 5,189 X 16,200 X Cash Bonds Payable, Net 540,000 X 540,000 X Cash Bonds Payable, Net Jan 01, 2020 540,000 Loss on Bond Retirement 15,989 5,189 X Discount on Bonds Payable 550,800 X Cash Req 2 to 5Step by Step Solution
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