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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)
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) Cash Interest Paid (B) Period Interest Expense (E) Carrying Value Period Ending $590,000 x 11.0% x 6/12 (E) x 10.0% x 6/12 (C) Amort. (A) (D) Unamortized (B) Balance $590,000 + (D) June 1/20 $34,484 $ 624,484 Dec. 1/20 $ 32,450 $ 31,224 $ 1,226 33,258 623,258 Dec. 1/26 32,450 30,249 2,201 12,771 602,771 June 1/27 32,450 30,139 2,311 10,460 600,460 Dec. 1/27 32,450 30,023 2,427 8,033 598,033 June 1/28 32,450 29,902 2,548 5,485 595,485 Dec. 1/28 32,450 29,774 2,676 2,809 592,809 June 1/29 Totals 32,450 29,641 2,809 0 590,000 $ 584,100 $ 549,616 $34,484 *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 Issued at premium & discount b. Journalize the issuance of bond A on June 1, 2020. View transaction list Journal entry worksheet < 1 Record the sale of bonds at a premium on the original issue date. Note: Enter debits before credits. Date June 01, 2020 General Journal Debit Credit Record entry Clear entry View general journal c. What is the contract interest rate for the issue bond A? Contract interest rate % > d. Interest of how much is paid how often for bond A issued? Interest paid e. What is the term of bond A issue? Term of each bond issue year term 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.) Balance Sheet (Partial) Non-current liabilities 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 View transaction list Journal entry worksheet 1 2 Record the payment of interest on bonds. Note: Enter debits before credits. Date December 01, 2027 General Journal Debit Credit Record entry Clear entry View general journal
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