Answered step by step
Verified Expert Solution
Question
1 Approved Answer
On January 1, 2020, The Justice League issued $100,000, 9%, four-year bonds. Interest is paid semiannually on June 30 and December 31. The bonds were
On January 1, 2020, The Justice League issued $100,000, 9%, four-year bonds. Interest is paid semiannually on June 30 and December 31. The bonds were issued at $96,768 to yield an annual return of 10%.
Required:
- Show how Justice League calculated the $96,768 bond price (round each to the whole dollar).
- Prepare an amortization schedule for the dates indicated using the effective interest rate method.
| Date | Cash Payment | Interest Expense | Amortization | Carry Value |
| 1/1/2020 |
|
|
|
|
| 6/30/2020 |
|
|
|
|
| 12/31/2020 |
|
|
|
|
| 6/30/2021 |
|
|
|
|
- Prepare the journal entries to record the issuance of the bond on January 1 and interest expense on June 30, 2020.
| Date | Account | DR | CR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3) What amount would the bonds be reported on the balance sheet at the end 2020?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started