On January 1, 2018, Loop Raceway issued 700 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 $681,631. Loop uses the straight-line bond amortization method and adjusts for any rounding errors when recording interest in the final year.

Required:

1. 1. Prepare a bond amortization schedule.

2. 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.

Complete this question by entering your answers in the tabs below Req 1; Req 2 to 5 Prepare a bond amortization schedule Changes During the Period Ending Bond Liability Balances Discount on Bonds Period Ended Carrying Cash Paid Discount Amortize Bonds Payable Interest Value d Expense Payable 01/01/18 1231/18 42,000 6,123$ 48,123 12/31/19 12/31/20 $ 700,00018,369 12,246 6,123 681,631 687,754 693,877 700,000 700,000 700,000 700,000 6,123 6,123 48,123 48,123 42,000 42,000 Req 1 Req 2 to 5> Req 1 Req 2 to 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. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Show less Date General Journal Debit 681,631 18,369 Credit Jan 01, 2018 Cash Discount on Bonds Payable Bonds Payable 700,000 48,123 Dec 31, 2018 Interest Expense 6,123 42,000 Discount on Bonds Payable Cash Dec 31, 2019 Interest Expense 48,123 Discount on Bonds Payable Cash 6,123 42,000 Dec 31, 2020Interest Expense 48,123 700,000 4 Bonds Payable Cash 706,123 42,000 Discount on Bonds Payable Jan 01, 2020 Bonds Payable 700,000 Cash 679,000 63,000 Gain on Bond Retirement Discount on Bonds Payable 42,000