On December 31, 2018, Tugaboo Corporation issues 5%, 10-year convertible bonds payable with a face value of $ 5 comma 000. The semiannual interest dates are June 30 and December 31. The market interest rate is 6%. Tugaboo amortizes bond discounts using the effective-interest method.

1.
Use the PV function in Excel Superscript ® to calculate the issue price of the bonds.
2.
Prepare an effective-interest method amortization table for the first four semiannual interest periods.
3.
Journalize the following transactions:
a.
Issuance of the bonds on December 31, 2018. Credit Convertible Bonds Payable.
b.
Payment of interest and amortization of the bond discount on June30, 2019.
c.
Payment of interest and amortization of the bond discount on December 31, 2019.
d.
Conversion by the bondholders on July 1, 2020, of bonds with a total face value of $ 2000000 into 120000 shares of Tugaboo's$1-par common stock.
4.
Show how Tugaboo would report the remaining bonds payable on its balance sheet at December 31, 2020.

Requirement 1. Use the PV function in Excel Superscript ®Excel®to calculate the issue price of the bonds. (Round your answer to the nearest whole dollar.)

The issue price of the bonds is $

.

Requirement 2. Prepare an effective-interest method amortization table for the first four semiannual interest periods.(Round your answers to the nearest whole dollar.)

Tugaboo Corporation
Amortization Table
Semiannual	Interest		Discount	Discount Account	Bond Carrying
Interest Date	Payment	Interest Expense	Amortization	Balance	Amount
12-31-2018

6-30-2019

12-31-2019

6-30-2020

12-31-2020

Requirement 3. Journalize the following transactions. (Record debits first, then credits. Exclude explanations from all journal entries.)

a. Record the issuance of the bonds on December 31,

20182018.

Credit Convertible Bonds Payable. (Round your answers to the nearest whole dollar.)

  

Journal Entry
Date		Accounts	Debit	Credit
2018
Dec	31

b. Record the payment of interest and amortization of the bonds on June 30,

20192019.

(Round your answers to the nearest whole dollar.)

Journal Entry
Date		Accounts	Debit	Credit
2019
Jun	30

c. Record the payment of interest and amortization of the bonds on December 31,

20192019.

(Round your answers to the nearest whole dollar.)

Journal Entry
Date		Accounts	Debit	Credit
2019
Dec	31

d. Record the conversion by the bondholders on July 1,

20202020,

of bonds with a total face value of

$ 2 comma 000 comma 000$2,000,000

into

120 comma 000120,000

shares of

TugabooTugaboo's

$1-par common stock. (Round your answers to the nearest whole dollar.)

Journal Entry
Date		Accounts	Debit	Credit
2020
Jul	1

Requirement 4. Show how

TugabooTugaboo

would report the remaining bonds payable on its balance sheet at December 31,

20202020.

(Calculate the discount by multiplying the discount calculated in the original amortization table by the fraction of bonds remaining. Round your answers to the nearest whole dollar.)

Tugaboo Corporation
Partial Balance Sheet
December 31, 2020
	Less: