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Mitchell Inc. issued 240, 6%, $1,000 bonds on January 1, 2020. The bonds pay cash interest semiannually each July 1, and December 31, and were
Mitchell Inc. issued 240, 6%, $1,000 bonds on January 1, 2020. The bonds pay cash interest semiannually each July 1, and December 31, and were issued to yield 7%. Debt issuance costs were $4,800. The bonds mature December 31, 2022, and the company uses the effective interest method to amortize bond discounts and debt issuance costs. Required a. Determine the selling price of the bonds, net of debt issuance costs. Round to the nearest dollar. b. Prepare an amortization schedule for the full bond term. c. Prepare journal entries on the following dates. 1. January 1, 2020, bond issuance. 2. July 1, 2020, interest payment. 3. December 31, 2020, interest payment. Bond Selling Price Amortization Schedule Journal Entries C. Note: List multiple debits or credits (when applicable) in alphabetical order. Note: Round your answers to the nearest whole dollar. Cr. Dr. 233,606 0 0 0 0 0 0 0 Date Account Name 1. Jan. 1, 2020 Cash Bonds Payable Discount on Bonds Payable 2. Jul. 1, 2020 Interest Expense Cash Discount on Note Payable 3. Dec 31, 2020 Interest Expense Cash Discount on Bonds Payable 0 0 0 0 0 0 + 0 0 0 0 Mitchell Inc. issued 240, 6%, $1,000 bonds on January 1, 2020. The bonds pay cash interest semiannually each July 1, and December 31, and were issued to yield 7%. Debt issuance costs were $4,800. The bonds mature December 31, 2022, and the company uses the effective interest method to amortize bond discounts and debt issuance costs. Required a. Determine the selling price of the bonds, net of debt issuance costs. Round to the nearest dollar. b. Prepare an amortization schedule for the full bond term. c. Prepare journal entries on the following dates. 1. January 1, 2020, bond issuance. 2. July 1, 2020, interest payment. 3. December 31, 2020, interest payment. Bond Selling Price Amortization Schedule Journal Entries C. Note: List multiple debits or credits (when applicable) in alphabetical order. Note: Round your answers to the nearest whole dollar. Cr. Dr. 233,606 0 0 0 0 0 0 0 Date Account Name 1. Jan. 1, 2020 Cash Bonds Payable Discount on Bonds Payable 2. Jul. 1, 2020 Interest Expense Cash Discount on Note Payable 3. Dec 31, 2020 Interest Expense Cash Discount on Bonds Payable 0 0 0 0 0 0 + 0 0 0 0
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