On January 1, 2015, Surreal Manufacturing issued 670 bonds, each with a face value of $1,000, a stated interest rate of 3 percent paid annually on December 31, and a maturity date of December 31, 2017. On the issue date, the market interest rate was 4 percent, so the total proceeds from the bond issue were $651,410. Surreal uses the effective-interest bond amortization method and adjusts for any rounding errors when recording interest in the final year Required Prepare a bond amortization schedule. (Round your answers to the nearest whole dollar Make sure that the Carrying value equals face value of the bond in the last period. Interest expense in the last period will result in the amount in Discount Amortized equaling Discount on Bonds Payable.) Changes During the Period Ending Bond Liability Balances Discount on Bonds Payable Period Interest Expense Discount Amortized Cash Paid Bonds Payable Carrying Value Ended 01/01/15 12/31/15 12/31/16 12/31/17 Complete the required journal entries to record the bond issue, interest payments on December 31, 2015 and 2016, interest and face value payment on December 31, 2017, and bond retirement. Assume the bonds are retired on January 1, 2017, at a price of 102. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your answers to the nearest whole dollar.) View transaction list Journal entry worksheet 2 4 Record the issuance of 670 bonds at face value of $1,000 each for $651,410. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2015 View general journal Record entry Clear entry Complete the required journal entries to record the bond issue, interest payments on December 31, 2015 and 2016, interest and face value payment on December 31, 2017, and bond retirement. Assume the bonds are retired on January 1, 2017, at a price of 102. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your answers to the nearest whole dollar.) View transaction list Journal entry worksheet 4 2 3 5 Record the interest payment on December 31, 2016. Note: Enter debits before credits. Date Debit General Journal Credit December 31, 2016 View general journal Record entry Clear entry Complete the required journal entries to record the bond issue, interest payments on December 31, 2015 and 2016, interest and face value payment on December 31, 2017, and bond retirement. Assume the bonds are retired on January 1, 2017, at a price of 102. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your answers to the nearest whole dollar.) View transaction list Journal entry worksheet 4 2 3 Record the interest and face value payment on December 31, 2017. Note: Enter debits before credits. Credit Date General Journal Debit December 31, 2017 View general journal Record entry Clear entry Complete the required journal entries to record the bond issue, interest payments on December 31, 2015 and 2016, interest and face value payment on December 31, 2017, and bond retirement. Assume the bonds are retired on January 1, 2017, at a price of 102. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your answers to the nearest whole dollar.) View transaction list Journal entry worksheet 2 4 5 Record the retirement of the bonds at a quoted price of 102, assuming the bonds are retired on January 1, 2017 rather than holding them until maturity. Note: Enter debits before credits Debit Date General Journal Credit January 01, 2017 View general journal Record entry Clear entry
