Question
Ivanhoe Corporation issued $390,000 of 5-year bonds on April 1, 2020. Interest is paid semi-annually on April 1 and October 1. Below is a partial
Ivanhoe Corporation issued $390,000 of 5-year bonds on April 1, 2020. Interest is paid semi-annually on April 1 and October 1. Below is a partial amortization schedule for the first few years of the bond issue.
Semi-Annual Interest Period | Interest Payment | Interest Expense | Amortization | Bond Amortized Cost | ||||||||
Apr.1, 2020 | $407,983 | |||||||||||
Oct. 1, 2020 | $7,800 | $6,120 | $1,680 | 406,303 | ||||||||
Apr. 1, 2021 | 7,800 | 6,095 | 1,705 | 404,598 | ||||||||
Oct. 1, 2021 | 7,800 | 6,069 | 1,731 | 402,867 | ||||||||
Apr. 1, 2022 | 7,800 | 6,043 | 1,757 | 401,110 | ||||||||
Oct. 1, 2022 | 7,800 | 6,017 | 1,783 | 399,327 | ||||||||
Apr. 1, 2023 | 7,800 | 5,990 | 1,810 | 397,517 |
Were the bonds issued at a discount or at a premium?
The bonds were issued at a premiumdiscount. |
eTextbook and Media
List of Accounts
Question Part Score
--/1
What is the bonds face value?
Face value | $ |
eTextbook and Media
List of Accounts
Question Part Score
--/1
What will the bonds amortized cost be at the maturity date?
Bond amortized cost | $ |
eTextbook and Media
List of Accounts
Question Part Score
--/1
What will be the total interest payment over the five-year life of the bonds? Total interest expense?
Total interest payment | $ | |
Total interest expense | $ |
eTextbook and Media
List of Accounts
Question Part Score
--/4
Prepare the journal entry to record the issuance of the bond. (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 0 for the amounts.)
Date | Account Titles and Explanation | Debit | Credit |
Apr. 1, 2020 | |||
(To record issuance of bonds.) |
eTextbook and Media
List of Accounts
Question Part Score
--/2
Prepare the journal entry for the first interest payment. (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 0 for the amounts.)
Date | Account Titles and Explanation | Debit | Credit |
Oct. 1, 2020 | |||
(To record interest payment.) |
eTextbook and Media
List of Accounts
Question Part Score
--/3
Prepare the adjusting journal entry on December 31, 2020, assuming this is Ivanhoes year end. (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 0 for the amounts. Round answers to 0 decimal places, e.g. 5,125.)
Date | Account Titles and Explanation | Debit | Credit |
Dec. 31, 2020 | |||
(To accrue interest expense.) |
eTextbook and Media
List of Accounts
Question Part Score
--/3
Prepare the journal entry for the payment of interest on April 1, 2021. Assume no reversing entries have been used. (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 0 for the amounts.)
Date | Account Titles and Explanation | Debit | Credit |
Apr. 1, 2021 | |||
(To record interest payment.) |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started