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On January 1, 2020, Surreal Manufacturing issued 790 bonds, each with a face value of $1,000, a stated interest rate of 3.50 percent paid annually
On January 1, 2020, Surreal Manufacturing issued 790 bonds, each with a face value of $1,000, a stated interest rate of 3.50 percent paid annually on December 31, and a maturity date of December 31, 2022. On the issue date, the market interest rate was 4.00 percent, so the total proceeds from the bond issue were $779,041. Surreal uses the effective-interest bond amortization method. Required: 1. Prepare a bond amortization schedule. (Round your final answers to the nearest whole dollar.) Changes During the Period Ending Bond Liability Balances Period Ended Interest Expense Cash Paid Discount Amortized Carrying Value 779,041 01/01/20 12/31/20 12/31/21 12/31/22 Discount on Bonds Bonds Payable Payable 790,000 790,000 790,000 790,000 2. Prepare the journal entry to record the bond issue. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction list X 1 Record the issuance of bond. Credit Note := journal entry has been entered Record entry Clear entry View general journal 3. Prepare the journal entries to record the interest payments on December 31, 2020, and 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to the nearest whole dollar.) View transaction list 1 Record the interest payments on December 31, 2020. > 2 Record the interest payments on December 31, 2021. Credit Note : = journal entry has been entered Record entry Clear entry View general journal
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