On January 1, 2020, Monty Limited paid $477.89170 for 10% bonds with a maturity value of $460,000. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2020, and mature on January 1 2025, with interest receivable on December 31 of each year. Monty 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 tities 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, c.8. 5275) Account Titles and Explanation Debit Credit Date Jan 1, 2020 Prepare a bond amortization schedule. (Round answers to 2 decimal places, eg, 52.75) Schedule of Interest Income and Bond Premium Amortization Effective Interest Method Date Cash Received Interest Income Premium Amortization Carrying Amc of Bonds 01/01/20 $ 12/31/20$ $ 12/31/21 12/31/22 12/31/23 12/31/24 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 no entry is required, select "No Entry* for the account titles and enter 0 for the amounts. Round answers to 2 decimal places, e.g. 52.75.) Account Titles and Explanation Debit Credit Date Dec 31, 2020 eTextbook and Media List of Accounts Prepare the journal entry to record interest received and interest Income for 2021. (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 entero for the amounts. Round answers to 2 decimal places, es, 5275.) Debit Credit Account Titles and Explanation Date Dec 31, 2021 I 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, select "No Entry for the account titles and enter for the amounts. Round answers to 2 decimal places. 52.75.) Account Titles and Explanation Jan 1, 2025 Date Debit Credit e Textbook and Media List of Accounts If Monty 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 amounts entered. Do not indent manually if ne entry is required select "No Entry for the accounts and enter for the amounts. Round answers to 2 decimal places, 5275 Debit Credit Account Titles and Explanation 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, es 52.75) Total interest income $ Effective interest method Straight-line method $ Total Interest Income under the two methods
