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On January 1, 2018, Loop Raceway issued 610 bonds, each with a face value of $1,000, a stated interest rate of 6 percent paid annually

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On January 1, 2018, Loop Raceway issued 610 bonds, each with a face value of $1,000, a stated interest rate of 6 percent paid annually on December 31, and a maturity date of December 31, 2020. On the issue date, the market interest rate was 7 percent, so the total proceeds from the bond issue were $593,992. Loop uses the straight-line bond amortization method and adjusts for any rounding errors when recording interest in the final year. Required: 1. Prepare a bond amortization schedule. 2-5. Prepare the journal entries to record the bond issue, the interest payments on December 31, 2018 and 2019, the interest and face value payment on December 31, 2020 and the bond retirement. Assume the bonds are retired on January 1, 2020, at a price of 97. Prepare a bond amortization schedule. Changes During the Period Ending Bond Liability Balances Period Ended Cash Paid Discount Amortized Interest Expense Bonds Payable Discount on Bonds Payable Carrying Value 01/01/18 12/31/18 12/31/19 12/31/20

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