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On January 1, 2018, Methodical Manufacturing issued 100 bonds, each with a face value of $1,000, a stated interest rate of 7 percent paid annually
On January 1, 2018, Methodical Manufacturing issued 100 bonds, each with a face value of $1,000, a stated interest rate of 7 percent paid annually on December 31, and a maturity date of December 31, 2020. On the issue date, the market interest rate was 6.30 percent, so the total proceeds from the bond issue were $101,857 Methodical uses the effective interest 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 joumal entry to record the bond issue, interest payments on December 31, 2018 and 2019, interest and face value payment on December 31, 2020 and the bond retirement. Assume the bonds ore retired on January 1, 2020, at a price of 104 Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 to 5 Prepare a bond amortization schedule. (Round your answers to the nearest whole dotlar 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 Premium Amortized equaling Premium on Bonds Payable.) Changes During the Period Ending Bond Liability Balances Period Interest Cash Paid Ended Bonds Payable Bonds Payable Carrying Value 01/01/18 5 12/31/18 12/31/19 12/31/20 Premium Amortized Premium on Expense 0 0 0 0 0 0 Reg 2 to 6 >
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