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Mahalo Boat Adventure Inc. has a July 31 year-end. It showed the following partial amortization schedules regarding two bond issues: Bond Issue A (A) Period
Mahalo Boat Adventure Inc. has a July 31 year-end. It showed the following partial amortization schedules regarding two bond issues: Bond Issue A (A) Period Ending June 1/20 Dec. 1/20 Dec. 1/26 June 1/27 Cash Interest Paid $620,000 8.8% x 6/12 (B) Period Interest (E) Carrying Expense (E) x 7.0% x 6/12 (C) Amort. (D) Unamortized Value $620,000 + (A) (B)) Balance (D) $40,888 $660,888 $ 24,800 $ 23,131 $ 1,669 39,219 659,219 24,800 22,278 2,522 13,996 633,996 24,800 22,190 2,610 11,386 631,386 Dec. 1/27 24,800 22,099 2,701 8,685 628,685 June 1/28 24,800 22,004 2,796 5,889 625,889 Dec. 1/28 24,800 21,906 2,894 2,995 622,995 June 1/29 24,800 21,805 2,995 0 620,000 Totals $446,400 $405,512 $40,888 "Adjusted for rounding (For all requirements, do not round intermediate calculations. Round the final answers to the nearest whole dollar.) Required: 1. Bond Issue A a. Were the bond A issued at a premium and/or discount? Issued at discount Issued at premium d. Interest of how much is paid how often for bond A issued? Interest paid Answer is not complete. Semi-annually f. Show how bond A would appear on the balance sheet under non-current liabilities at July 31, 2026. (Enter all amounts as positive values.) Non-current liabilities Answer is not complete. Balance Sheet (Partial Bonds payable, 11.0%, due June 1, 2029 Add: Premium on bonds payable $620,000 $ 620,000 g. Calculate the total bond A interest expense that would appear on the income statement for the year ended July 31, 2027. Total bond interest expense h. Independent of (a) through (g), assume bond A issues were retired on December 1, 2027, at 97. Record the entries No 1 Date December 01, 202 Bond interest expense Answer is not complete. General Journal Debit Credit Premium on bonds payable Cash 2 December 01, 202 Bonds payable Premium on bonds payable Gain on retirement of bonds Cash 620,000 8,685 ( 27,285 601,400
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