Mahalo Boat Adventure Inc. has a July 31 year-end. It showed the following partial amortization schedules regarding two bond issues:
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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) Cash Interest Paid $590,000 11.0% * 6/12 (B) Period Interest Expense (E) * 10.08 x 6/12 (C) Amort. (A) - (B) (E) Carrying Value $590,000 + (D) $ 624,484 623, 258 (D) Unamortized Balance $34,484 33, 258 Period Ending June 1/20 Dec. 1/20 $ 32,450 $ 31,224 $ 1,226 Dec. 1/26 June 1/27 Dec. 1/27 June 1/28 Dec. 1/28 June 1/29 Totals 32,450 32, 450 32,450 32,450 32,450 32,450 $ 584,100 30, 249 30,139 30,023 29,902 29,774 29,641 $ 549,616 2,201 2,311 2,427 2,548 2,676 2,809 $34,484 12,771 10, 460 8,033 5, 485 2,809 0 602,771 600, 460 598,033 595, 485 592,809 590,000 *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 General Journal Debit Credit June 01, 2020 Cash Premium on bonds payable Bonds payable 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 $ 0 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 Record the payment of interest on bonds. Note: Enter debits before credits. General Journal Debit Credit Date December 01, 2027 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 Record the interest paid on bonds. Note: Enter debits before credits. General Journal Debit Credit Date December 01, 2027 Record entry Clear entry View general journal h. Independent of (a) through (g), assume that bond B issues was retired on December 1, 2027, at 97. Record the entries. View transaction list Journal entry worksheet Record the retired bonds. Note: Enter debits before credits. Date General Journal Debit Credit December 01, 2027 Record entry Clear entry View general journal
