Question
On January 1, 2022, the board of directors of Papermaker Inc. issued 20-year, 4% bonds with a par value of $900,000 to finance equipment purchases.
On January 1, 2022, the board of directors of Papermaker Inc. issued 20-year, 4% bonds with a par value of $900,000 to finance equipment purchases.
1. Using the straight-line method to amortize bond discounts and premiums, (a) prepare the issuer's journal entry to record the initial bond issuance and the first semiannual interest payment with the amortization of any bond discount or premium assuming the bonds were issued at par, and (b) calculate the total bond interest expense over the life of the bonds.
2. Using the straight-line method to amortize bond discounts and premiums, (a) prepare the issuer's journal entry to record the initial bond issuance and the first semiannual interest payment with the amortization of any bond discount or premium assuming the bonds were issued at 88, and (b) calculate the total bond interest expense over the life of the bonds.
3. Using the straight-line method to amortize bond discounts and premiums, (a) prepare the issuer's journal entry to record the initial bond issuance and the first semiannual interest payment with the amortization of any bond discount or premium assuming the bonds were issued at 106, and (b) calculate the total bond interest expense over the life of the bonds.
| GENERAL JOURNAL | ||||
| Date | Accounts | Debit | Credit | |
| 1-Jan | ||||
| Issued bonds at par | ||||
| 30-Jun | ||||
| Semiannual interest payment at par | ||||
| Calculate the total interest expense over the life of the bond when issued at par value. Place your answer in this cell. | ||||
| GENERAL JOURNAL | ||||
| Date | Accounts | Debit | Credit | |
| 1-Jan | ||||
| Issued bonds at 88 | ||||
| 30-Jun | ||||
| Semiannual interest payment | ||||
| Calculate the total interest expense over the life of the bond when issued at a discount. Place your answer in this cell. | ||||
| GENERAL JOURNAL | ||||
| Date | Accounts | Debit | Credit | |
| 1-Jan | ||||
| Issued bonds at 106 | ||||
| 30-Jun | ||||
| Semiannual interest payment | ||||
| Calculate the total interest expense over the life of the bond when issued at a premium. Place your answer in this cell. | ||||
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Hospitals What They Are And How They Work
Authors: Don Griffin, Donald J Griffin
3rd Edition
076372758X, 9780763727581
