On April 1. 2019, Sarkar Sailboats sold 20,000 unit of Bonds of its 11% coupon rate, 15-year, $1,000 face value per bond. The market interest rate of the bond is 12% on the date of issuance. Interest payment dates are April 1 and October 1. On July 1, 2020, Sarkar retired 40% of its Bonds at the price of 102 plus accrued interest.

Instructions

Prepare the journal entries needed on the books of Sarkar to record the following:

a.April 1, 2019: issuance of the bonds.

b.Prepare the amortization schedule until October 1, 2020

c.October 1, 2019: payment of semiannual interest.

d.December 31, 2019: accrual of interest expense and amortization of any premium/discount.

e.April 1, 2020: payment of semiannual interest.

f.July 1,2020: Payment of interest expense for the 40% of its Bonds retired and amortization of any premium/discount.

July 1, 2020: Early extinguishment of 40% of its bonds.

the sheet for question b

Year Cash Paid Interest Expense Amortized amount Carrying Amount of Bonds

4/1/19

10/1/19

4/1/20

10/1/20