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Marigold Co. is building a new hockey arena at a cost of $2,360,000. It received a downpayment of $500,000 from local businesses to support
Marigold Co. is building a new hockey arena at a cost of $2,360,000. It received a downpayment of $500,000 from local businesses to support the project, and now needs to borrow $1,860,000 to complete the project. It therefore decides to issue $1,860,000 of 10%, 10-year bonds. These bonds were issued on January 1, 2019, and pay interest annually on each January 1. The bonds yield 9%. (a) Your answer is correct. Prepare the journal entry to record the issuance of the bonds on January 1, 2019. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation January 1,2019 Cash Bonds Payable Premium on Bonds Payable Debit 1979356 Credit 1860000 119356 Your answer is correct. Prepare a bond amortization schedule up to and including January 1, 2023, using the effective interest method. (Round answers to O decimal places, e.g. 38,548.) Cash Paid 186000 Interest Expense 178142 Premium Amortization 7857 $ Carrying Amount of Bonds 1979356 1971498 186000 177434 8565 1962933 186000 176663 9336 1953597 186000 175823 10176 1943420 Assume that on July 1, 2022, Marigold Co. redeems half of the bonds at a cost of $1,023,400 plus accrued interest. Prepare the journal entry to record this redemption. (Round answers to O decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date July 1, 2022 Account Titles and Explanation Debit Credit July 1, (To record interest) 2022 (To record reacquisition)
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