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ACC 302 - Long-term Debt: In-Clase Activity 3 Part 1 Fill in the blank boxes shown below, beginning with the second table, for a 10 year, 78, $10,000 bond. Interest payable semiannually. Yield - 67 Cash Flow Amount Present Value Factor Present Value 10,000 5,537 .55368 14.87747 350 5, 207 Maturity Value Interest Payment Issue Price 10,744 Amount Item Total interest paid over the 10 year period Premium on the Bond Total interest expense over the 10 year period Six Month Period Beginning Loan Balance LOAN AMORTIZATION TABLE Appropriate Interest Interest Expense Rate Interest Paid Premium Amortized 1 2 na na Column Total ACC 302 - Long-term Debt-In-class Activity 3 Part II Assume that the bond was dated and issued on 3/1/X1. 1. What is the adjusting entry required at 12/31/x? INTEREST EXPENSE PREMIUM ON BONDS PAYABLE INTEREST PAYABLE What is the liability balance at 12/31/1: for the bond? 10,000 744 Bands Payable Premium - Beginning Balance Amortization Pirst six months Last four month Liability balance (2) for interest payable? How much interest expense is reported in the income statement for 20x12 Pirst six months Last four months Interest Expense ACC 302 - Long-term Debt - In-Class Activity 3 Part III Complete the rest of this exercise at home as described below Turn in for a grade during the next class period. 1. Record all journal entries for the first year (3/1/x1 - 12/31/xi) on the books of the investor under the assumption that the investor plans to hold the investment until maturity i.e., reports the investment at amortized cost"). Hint: Do not use a premium or discount account. Amortize discounts and premiums as a direct adjustment to the Investment in Bonds account. 2. Describe what the investor will report (give category and dollar amounts) in the balance sheet and income statement at 12/31/xi