In the following two independent cases, the company closes its books on December 31: 1. Marin Inc. sells $ 2.17 million of 8% bonds on March 1, 2020. The bonds pay interest on September 1 and March 1. The bonds' due date is September 1, 2023. The bonds yield 10%. 2. Sweet Acacia Ltd. sells $5.30 million of 9% bonds on June 1, 2020. The bonds pay interest on December 1 and June 1. The bonds' due date is June 1, 2024. The bonds yield 8%. On October 1, 2021, Sweet Acacia buys back $ 1.06 million worth of bonds for $ 1.85 million, including accrued interest. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Your answer is correct. For situation 1, use the effective interest method for discount and premium amortization and prepare any necessary amortization tables. (Hint: Refer to Chapter 3 for tips on calculating.) (Round answers to O decimal places, e.g. 5,275.) Schedule of Bond Discount Amortization Effective Interest Method Discount Cari For situation 1, use the effective interest method for discount and premium amortization and prepare any necessary amortization tables. (Hint: Refer to Chapter 3 for tips on calculating.) (Round answers to 0 decimal places, e.g. 5,275.) Schedule of Bond Discount Amortization Effective Interest Method Cari Discount Amortized Date Cash Paid Interest Expense 3/1/20 $ 9/1/20 $ 86800 $ 102222 $ S 15422 3/1/21 86800 102993 16193 9/1/21 86800 103803 17003 3/1/22 86800 104653 17853 9/1/22 86800 105545 18745 3/1/23 86800 106483 19683 9/1/23 86800 107467 20667 For situation 1, use the effective interest method for discount and premium amortization and prepare any necessary amortization tables. (Hint: Refer to Chapter 3 for tips on calculating.) (Round answers to O decimal places, e.g. 5,275.) Schedule of Bond Discount Amortization Effective Interest Method Discount Amortized Carrying Amount of Bonds Cash Paid Interest Expense $ 2044436 86800 $ 102222 $ 15422 2059858 86800 102993 16193 2076051 86800 103803 17003 2093054 86800 104653 17853 2110907 86800 105545 18745 2129652 86800 106483 19683 2149335 86800 107467 20667 2170002 Prepare all of the relevant journal entries from the time of sale until the date indicated. For situation 1, prepare the journal entries through December 31, 2021. Assume that no reversing entries were made. Use the amounts arrived at from using (1) factor tables, (2) a financial calculator, or (3) Excel function PV from the time of sale until the date indicated. Use the effective interest method for discount and premium amortization. (Hint: Refer to Chapter 3 for tips on calculating.) (For calculation purposes, use 5 decimal places as displayed in the factor table provided and final answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit /20 Cash 2044436 Bonds Payable 2170000 /20 Interest Expense 102222 Bonds Payable 1422 Cash 86800 31/20 Interest Expense 68662 10 Bonds Payable 1422 Cash 86800 12/31/20 Interest Expense 68662 Bonds Payable 10795 Interest Payable 57867 3/1/21 Interest Expense 34331 Interest Payable 57867 Bonds Payable 5398 Cash 86800 9/1/21 Interest Expense 103803 Bonds Payable 17003 Cash 86800 Interest Payable 57867 3/1/21 Interest Expense 34331 Interest Payable 57867 Bonds Payable 5398 Cash 86800 9/1/21 Interest Expense 103803 Bonds Payable 17003 Cash 86800 12/31/21 Interest Expense 69769 Bonds Payable 11902 Interest Payable 57867 For situation 2, use the effective interest method for discount and premium amortization and prepare any necessary amortization tables. (Hint: Refer to Chapter 3 for tips on calculating.) (Round answers to 0 decimal places, e.g. 5,275.) Schedule of Bond Discount Amortization Effective Interest Method Ca Premium Amortized Date Cash Paid Interest Expense 6/1/20 $ 12/1/20 $ 238500 $ $ 6/1/21 238500 12/1/21 238500 6/1/22 238500 12/1/22 238500 6/1/23 238500 For situation 2, use the effective interest method for discount and premium amortization and prepare any necessary amortization tables. (Hint: Refer to Chapter 3 for tips on calculating.) (Round answers to O decimal places, e.g. 5,275.) Schedule of Bond Discount Amortization Effective Interest Method Premium Amortized Carrying Amount of Bonds Cash Paid Interest Expense $ 238500 $ $ 238500 238500 238500 238500 238500 Effective Interest Method Ca Premium Amortized Date Cash Paid Interest Expense 6/1/20 $ 12/1/20 $ 238500 $ $ 6/1/21 238500 12/1/21 238500 6/1/22 238500 12/1/22 238500 6/1/23 238500 12/1/23 238500 6/1/24 238500 Effective Interest Method Premium Amortized Carrying Amount of Bonds Cash Paid Interest Expense $ 238500 $ $ 238500 238500 238500 238500 238500 238500 238500 Prepare all of the relevant journal entries from the time of sale until the date indicated. For situation 2, prepare the journal entries through December 31, 2022. Assume that no reversing entries were made. Use the amounts arrived at from using the financial calculator. Use the effective interest method for discount and premium amortization. (Hint: Refer to Chapter 3 for tips on calculating.) (For calculation purposes, use 5 decimal places as displayed in the factor table provided and final answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter Ofor the amounts.) Date Account Titles and Explanation Debit Credit 6/1/20 Cash Bonds Payable 12/1/20 Interest Expense Bonds Payable Cash 238500 12/31/20 Interest Expense Bonds Payable Interest Payable 39750 Cash 238500 12/31/20 Interest Expense Bonds Payable Interest Payable 39750 6/1/21 Interest Expense Interest Payable 39750 Bonds Payable Cash 238500 10/1/21 Interest Expense Bonds Payable Cash (To record payment of interest and amortization amount) 10/1/21 Bonds Payable DO Gain on Redemption of Bonds Cash (To record reacquisition of bonds) 12/1/21 Interest Expense Bonds Payable Cash 12/31/21 Interest Expense Bonds Payable Interest Payable 6/1/22 Interest Expense Interest Payable 1 Cash 12/31/21 Interest Expense Bonds Payable Interest Payable 6/1/22 Interest Expense Interest Payable Bonds Payable Cash 12/1/22 Interest Expense Bonds Payable Cash