On January 1, 2020, Bramble Limited paid $396,676,70 for 14% bonds with a maturity value of $370,000. The bonds provide the bondholders with a 12% yield. They are dated January 1, 2020, and mature on January 1, 2025, with interest receivable on December 31 of each year. Bramble accounts for the bonds using the amortized cost approach, applies ASPE using the effective interest method, and has a December 31 year end Prepare the journal entry to record the bond purchase (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts Round answers to 2 decimal places, eg. 52.75.) Date Account Titles and Explanation Debit Credit Jan 1 2020 I e Textbook and Media List of Accounts Prepare a bond amortization schedule. (Round answers to 2 decimal places, es, 52.75) Schedule of Interest Income and Bond Premium Amortization Effective Interest Method Date Cash Received Interest income Premium Amortization Carrying An of Bond Prepare a bond amortization schedule. (Round answers to 2 decimal places, s. 52.75.) Schedule of Interest Income and Bond Premium Amortization Effective Interest Method Date Cash Received Interest Income Premium Amortization Carrying An of Bond 01/01/20 39 12/31/20 $ 51.800 $ 47.60120 $ 4198.80 39 12/31/21 51.800 4709735 4.702,65 30 12/31/22 51.800 46.533.03 5.266 92 38 12/31/23 51.800 45.900.99 5.899.01 I 7 12/31/24 51800 45.193.11 6,606 89 37 232 32569 $ e Textbook and Media List of Accounts Prepare the journal entry to record interest received and interest income for 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If rio entry is required, select "No Entry for the account titles and enter for the amounts, Round answers to 2 decimal places, s. 5275) Date Account Titles and Explanation Debit Credit Dec 31, 2020 Cash 51,800 Bond Investment at Amortized Cost 4.198.80 Interest income 4760120 e Textbook and Media List of Accounts Prepare the foumal entry to record interest received and interest income for 2021. (Credit account titles ore automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts. Round answers to 2 decimal places, es. 52.75.) Date Account Titles and Explanation Debit Credit Dec 31 2021 51.800 470265 Bond investment at Amortized Cost Interest income 47,09735 Prepare the journal entry to record the redemption of the bond at maturity. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, seled "No Entry for the account titles and enter for the amounts. Round answers to 2 decimal places, s. 52.750 Date Account Titles and Explanation Debit Credit Jan 1 2025 Cash 370.000 Bond Investment at Amortized Cost 370.000 e Textbook and Media List of Accounts If Bramble used the straight line method of discount/premium amortization, prepare the journal entry to record interest received and interest income the company would make each year. (Credit account titles are automatically indented when the amount is entered Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts Round answers to 2 decimal places, es, 52750 Account Titles and Explanation Debit Credit Gash 51800 Bond investment at Amortized Cost 5.334 36 Interest Income 46.46514 Compare the total interest income reported over the five year period under the effective interest method and the straight-line method. (Round answers to 2 decimal places, eg 52.75) Total interest income Effective interest method $ Straight-line method Total interest income under the two methods
