On January 1, 2017, Indigo Company issued $2,000,000 face value, 7%, 15-year bonds at $2,194,245. This price resulted in a 6% effective-interest rate on the bonds. Indigo uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest on each January 1. Prepare the journal entries to record the following transactions. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
| 1. | | The issuance of the bonds on January 1, 2017. |
| 2. | | Accrual of interest and amortization of the premium on December 31, 2017. |
| 3. | | The payment of interest on January 1, 2018. |
| 4. | | Accrual of interest and amortization of the premium on December 31, 2018. |
D e C iego Customer Se 106 Apte dia 126, Apaly the WAS Maes m url Pla ' Tool iceMore X Gel lome rk i lelp w h Chey, x - NP https:/ assessmenteducation wi ey.com was assessment player/products 4Go23dd-749b 4a25-8582 528226c cc1 3d/assessments 948cfa3-27804dc3-93a8-G7cbf9000c3a/question/1 On January 1, 2017 Indigo Company issued $2,000,000 face value, 7%, 15-year bonds at $2,194,245. This price resulted in a 6% effective interest rate on the bonds Indigo uses the effective interest method to amartize bond premium or discaunt. The hands pay annual interest on each January 1. Your answer is partially correct. Prepare the journal entries to record the following transactions. (Round answers to O decimal places, eg. 125. Credit account titles are automatically indented when amount is entered. Do not indent manualy) 1. The issuance of the bands on January 1, 2017 2. Accrual of interest and amortization of the premium on December 31, 2017 3. The payment of intereston January 1, 2018. 4. Accrual of interest and amortization of the premium on December 31, 2018. Debit No. DateAccount Titles and Explanation Credit 1. Jan. 1, 2017caslh 2191215 Bonds Payable Premium on Bonds Payable 191245 2. Dec. 31, 2017 Interest Expense 131655 Premium on Bonds Payable 8345 Interest Payable 140n0 12:15 PM 219 Type here to search D e C iego Customer Se 106 Apte dia 126, Apaly the WAS Maes m url Pla ' Tool iceMore X Gel lome rk i lelp w h Chey, x https:/ assessmenteducation wi ey.com was assessment player/products 4Go23dd-749b 4a25-8582 528226c cc1 3d/assessments 948cfa3-27804dc3-93a8-G7cbf9000c3a/question/1 3. Jan. 1, 2018 Interest Payable 140000 Cash 14C030 4. Dec. 31,2018 cash Bonds Payable Premium on Bonds Payable 120000 eTextbook and Media List of Accounts Your answer is incorrect. Shothe proper long-term liabilities balance sheet presentation for the liability for bonds payable at December 31, 2018. (Round answers to O decimal places, eg. 125.) INDIGO COMPANY Balance Sheet (Partial) 12:15 PM 219 Type here to search D e C iego Customer Se 106 Apte dia 126, Apaly the WAS Maes m url Pla ' Tool iceMore X Gel lome rk i lelp w h Chey, x https://assessmenteducation wi ey.com was assessment player/products 4Go29dd-749b 4a25-8582-528226c cc1 3d/assessments 948cfa3-27804dc3-93a867cbf9000c3a/question/1 Show the proper log-term liabilities balance shect presentation for the liability for bonds payable at December 31, 2018. (Round answers to O declmal places, eg. 125.) INDIGO COMPANY Balance Sheet (Partial) eTextbook and Media e Textbook 1 e Textbaok 2 eTextbook 3 List of Accournts X Your answer is incorrect. Provide the answers to the followingquestions. 12:16 PM Type here to search 219 D e C iego Customer Se 106 Apte dia 126, Apaly the WAS Maes m url Pla ' Tool iceMore X Gel lome rk i lelp w h Chey, x https:/ assessmenteducation wi ey.com was assessment player/products 4Go23dd-749b 4a25-8582 528226c cc1 3d/assessments 948cfa3-27804dc3-93a8-G7cbf9000c3a/question/1 X Your answer is incorrect. Provide the answers to the follawing questions. 1. What amount of interest expense is reported for 2018? (Round answer to O decimal places, eg. 125.) Interest expense to be reported 2. The bond interest expense reported in 2018 would he the amount that would be renorted if the straight-line methad of amortization were used. eTextbook and Media e Textbook 1 e Textbaok 2 eTextbook 3 List of Accournts Attempts: 2 of 4 used Save for Later Check Answer Send to Gradebook Next >
