On June 30, 2020, Ivanhoe Limited issued $5 million of 20-year, 15% bonds for $5,707,274, which provides a yield of 13%. The company uses the effective interest method to amortize any bond premium or discount. The bonds pay semi-annual interest on June 30 and December 31.

Prepare the journal entries to record the following transactions: (Round answers to 0 decimal places, e.g. 5,275. 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.)

1.		The issuance of the bonds on June 30, 2020
2.		The payment of interest and the amortization of the premium on December 31, 2020
3.		The payment of interest and the amortization of the premium on June 30, 2021
4.		The payment of interest and the amortization of the premium on December 31, 2021

Date	Account Titles and Explanation	Debit	Credit
June 30, 2020	enter an account title for the journal entry on June 30	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on June 30	enter a debit amount	enter a credit amount
Dec. 31, 2020	enter an account title for the journal entry on December 31	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on December 31	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on December 31	enter a debit amount	enter a credit amount
June 30, 2021	enter an account title for the journal entry on June 30	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on June 30	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on June 30	enter a debit amount	enter a credit amount
Dec. 31, 2021	enter an account title for the journal entry on December 31	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on December 31	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on December 31	enter a debit amount	enter a credit amount

List of Accounts

Show the proper presentation for the liability for bonds payable on the December 31, 2020 SFP. (Round answer to 0 decimal places, e.g. 5,275.)

Ivanhoe Limited Statement of Financial Position (Partial) choose the accounting period December 31, 2020For the Year Ended December 31, 2020For the Quarter Ended December 31, 2020
select an opening section name Intangible AssetsCurrent LiabilitiesTotal Intangible AssetsTotal Liabilities and Partners' EquityTotal Non-current LiabilitiesTotal Current LiabilitiesTotal Long-term InvestmentsTotal AssetsLong-term debt InvestmentsTotal Property, Plant and EquipmentTotal Current AssetsTotal Long-term LiabilitiesTotal LiabilitiesTotal Partners' EquityCurrent AssetsProperty, Plant, and EquipmentPartners' EquityLong-term Liabilities
enter a balance sheet item		$enter a dollar amount

List of Accounts

What amount of interest expense is reported for 2020?

Interest expense to be reported

$enter a dollar amount of Interest expense to be reported

List of Accounts

What is the total cost of borrowing over the life of the bond? (Round answer to 0 decimal places, e.g. 5,275.)

Total cost of borrowing over the life of the bond

$enter the Total cost of borrowing over the life of the bond in dollars rounded to 0 decimal places

Splish Brothers Inc., a private company following ASPE, is having difficulty meeting its working capital requirements. As a result, on January 1, 2020, the company sold bonds with a face value of $1.4 million, receiving $1,000,000 in cash. The bonds have an interest rate of 11% and mature on January 1, 2022. Interest is payable semi-annually on January 1 and July 1. Set up a schedule of interest expense and discount amortization under the straight-line method.

Schedule of Discount Amortization StraightLine Method
Year		Credit Interest Payable		Debit Interest Expense		Credit Bond Payable		Carrying Amount of Bonds
Jan. 1, 2020								$
July 1, 2020		$		$		$
Dec. 31, 2020
July 1, 2021
Dec. 31, 2021