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Manchester Co. is building a new Basketball arena at a cost of $5,000,000. It received a down-payment of $1,000,000 from local businesses to support the
Manchester Co. is building a new Basketball arena at a cost of $5,000,000. It received a down-payment of $1,000,000 from local businesses to support the project, and now needs to borrow $4,000,000 to complete the project. It therefore decides to issue $4,000,000 of 11.5%,10-year bonds. These bonds were issued on January 1,2014 and pay interest annually on each 1 January. The bonds yield 10%. Required: 1. Prepare the journal entry to record the issuance of the bonds on January 1,2014. 2. Prepare a bond amortization schedule up to and including January 1,2017. 3- Assume that on July 1, 2017, Manchester Co. retires one third of the bonds at a cost of $1,426,564 cash. Prepare the journal entry to record this retirement. Manchester Co. is building a new Basketball arena at a cost of $5,000,000. It received a down-payment of $1,000,000 from local businesses to support the project, and now needs to borrow $4,000,000 to complete the project. It therefore decides to issue $4,000,000 of 11.5%,10-year bonds. These bonds were issued on January 1,2014 and pay interest annually on each 1 January. The bonds yield 10%. Required: 1. Prepare the journal entry to record the issuance of the bonds on January 1,2014. 2. Prepare a bond amortization schedule up to and including January 1,2017. 3- Assume that on July 1, 2017, Manchester Co. retires one third of the bonds at a cost of $1,426,564 cash. Prepare the journal entry to record this retirement
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