On January 1, 2017 Jade Company issued $2,000,000 face value, 7%, 10-year bonds at $2,147,193 this price resulted in a 6% effective-interest rate on the bonds. The bonds pay annual interest on each January 1. Instructions (round all computations to the nearest dollar.) (a) Prepare the journal entry to record the issuance of the bonds on January 1, 2017. (b) Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, 2017 and December 31, 2018 assuming the use of straight- line method to amortize the discount/premium. (c) Prepare an amortization table for 10 interest period for this bond issue using the effective interest method to amortize the discount/premium. (d) Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, 2017. (e) Prepare the journal entry to record the payment of interest on January 1, 2018. (f) Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, 2018. (g) Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, 2019. Please Use the Excel file problem 2

Problem 1: Problem 2: Debit Credit Journal Entry to Record Issuance of Bonds Jan 1, 17 Account Account Account Schedule of Bond Discount Amortization Effective Interest Method 5% Bonds Sold to Yield 6% Date Jan 1, 17 Dec 31, 17 Dec 31, 18 Dec 31, 19 Dec 31, 20 Dec 31, 21 Dec 31, 22 Dec 31, 23 Dec 31, 24 Dec 31, 25 Dec 31, 26 Cash Paid Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Carrying Interest Bond Value Expense Premium of Bonds Amount Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Journal Entries to Record Interest Payments and Amortization Dec 31, 17 Account Account Account Jan 1, 18 Account Account Debit Credit Journal Entry to Record Issuance of Bonds Jan 1, 13 Account Account Account Schedule of Bond Discount Amortization Effective Interest Method 7% Bonds Sold to Yield 6% Date Jan 1, 17 Dec 31, 17 Dec 31, 18 Dec 31, 19 Dec 31, 20 Dec 31, 21 Dec 31, 22 Dec 31, 23 Dec 31, 24 Dec 31, 25 Dec 31, 26 Cash Paid Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Carrying Interest Bond Value Expense Discount of Bonds Amount Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Formula Journal Entries to Record Interest Payments and Amortization Dec 31, 17 Account Account Account Jan 1, 18 Account Account Dec 31, 18 Account Account Account Dec 31, 18 Account Account Account Dec 31, 19 Account Account Account Dec 31, 19 Account Account Account EXAM I - VERSION II Problem 1: Part B Problem 2: Debit Credit Journal Entry to Record Issuance of Bonds Jan 1, 17 Account Account Account Schedule of Bond Discount Amortization Straight-Line Method 5% Bonds Sold to Yield 6% Date Jan 1, 17 Dec 31, 17 Dec 31, 18 Part B Carrying Interest Bond Value Expense Premium of Bonds Amount Formula Formula Formula Formula Formula Formula Formula Formula Cash Paid Debit Credit Journal Entry to Record Issuance of Bonds Jan 1, 17 Account Account Account Schedule of Bond Discount Amortization Straight-Line Method 7% Bonds Sold to Yield 6% Date Jan 1, 17 Dec 31, 17 Dec 31, 18 Carrying Interest Bond Value Expense Discount of Bonds Amount Formula Formula Formula Formula Formula Formula Formula Formula Cash Paid Journal Entries to Record Interest Payments and Amortization Journal Entries to Record Interest Payments and Amortization Dec 31, 17 Account Account Account Dec 31, 17 Account Account Account Dec 31, 18 Account Account Account Dec 31, 18 Account Account Account