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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) (B) Cash Interest Period (E) Interest Period Ending June 1/20 Dec. 1/20 Paid $650,000 12.0% x 6/12 Expense (E) 11.0% (C) Amort. (D) Unamortized 6/12 (A) - (B) Balance $36,550 Carrying Value $650,000 + (D) $ 686,550 $ 39,000 $ 37,760 $ 1,240 35,310 685,310 Dec. 1/26 39,000 36,643 2,357 13,879 663,879 June 1/27 39,000 36,513 2,487 11,392 661,392 Dec. 1/27 39,000 36,377 2,623 8,769 658,769 June 1/28 39,000 36,232 2,768 6,001 656,001 Dec. 1/28 39,000 36,080 2,920 3,081 653,081 June 1/29 Totals 39,000 35,919 3,081 0 650,000 $ 702,000 $ 665,450 $36,550 *Adjusted for rounding (For all requirements, do not round intermediate calculations. Round the final answers to the nearest whole dollar.) Bond Issue B Period Ending Apr. 1/18 (A) Cash Interest Paid $510,000.0 12.0% 3/12 (B) Period Interest Expense (E) 12.5% 3/12 (C) Amort. (D) Unamortized (E) Carrying Value $510,000 (D) (A) - (B) Balance $14,443 $ 495,557 Jul. 1/18 $ 15,300 $ 15,486 $ 186 14,257 495,743 : Apr. 1/26 15,300 15,783 483 4,454 505,546 Jul. 1/26 15,300 15,798 498 3,956 506,044 Oct. 1/26 15,300 15,814 514 3,442 506,558 Jan. 1/27 15,300 15,830 530 2,912 507,088 Apr. 1/27 15,300 15,847 547 2,365 507,635 Jul. 1/27 15,300 15,864 564 1,801 508,199 Oct. 1/27 15,300 15,881 581 1,220 508,780 Jan. 1/28 15,300 15,899 599 621 509,379 Apr. 1/28 15,300 15,921 * 621 0 510,000 Totals $ 612,000 $ 626,443 $14,443 *Adjusted for rounding f. Show how bond B would appear on the balance sheet under non-current liabilities at July 31, 2026. g. Calculate the bond B interest expense that would appear on the income statement for the year ended July 31, 2027. h. Independent of (a) through (g), assume that bond B issues was retired on December 1, 2027, at 97. Record the entries. No 1 Date Answer is not complete. General Journal Debit Credit December 01, 202 Bond interest expense Interest payable Discount on bonds payable Cash 2 December 01, 202 Bonds payable Discount on bonds payable Cash Notes payable h. Independent of (a) through (g), assume bond A issues were retired on December 1, 2027, at 97. Record the entries Answer is not complete. No Date General Journal Debit Credit 1 December 01, 202 Bond interest expense 36,377 x Interest payable Premium on bonds payable Cash 2 December 01, 202 Bonds payable Premium on bonds payable Gain on retirement of bonds Cash 39,000 650,000 8,769 28,269 630,500
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