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*only partially done On January 1, 2015, Surreal Manufacturing issued 630 bonds, each with a face value of $1,000, a stated interest rate of 3
*only partially done
On January 1, 2015, Surreal Manufacturing issued 630 bonds, each with a face value of $1,000, a stated interest rate of 3 percent paid annually on December 31, and a maturity date of December 31, 2017. On the issue date, the market interest rate was 4 percent, so the total proceeds from the bond issue were $612,519. Surreal uses the effective-interest bond amortization method and adjusts for any rounding errors when recording interest in the final year Required Prepare a bond amortization schedule. (Round your answers to the nearest whole dollar Make sure that the Carrying value equals face value of the bond in the last period. Interest expense in the last period will result in the amount in Discount Amortized equaling Discount on Bonds Payable.) Changes During the Period Ending Bond Liability Balances Discount on Period Interest Expense Discount Amortized Bonds Pa Bonds Payable Carrying Value 0 0 0 0 Cash Paid Ended 01/01/15 12/31/15 12/31/16 12/31/17 0 0 0 0 Record the issuance of 630 bonds at face value of $1,000 ach for $612,519 2 Record the interest payment on December 31, 2015. 3Record the interest payment on December 31, 2016. 4 Record the interest and face value payment on December 31, 2017. 5 Record the retirement of the bonds at a quoted price of 101, assuming the bonds are retired on January 1, 2017 rather than holding them until maturity No Date General Journal Debit 17,481 612,519 Credit January 01, 2015 Discount on Bonds Payable Bonds Payable 630,000 December 31 2015 'Interest Expense Discount on Bonds Payable Cash December 31 2016 'Interest Expense Discount on Bonds Payable Cash December 31, 2017 Interest xpense 4 Bonds Payable Discount on Bonds Payable Cash January 01, 2017 Bonds Payable Loss on Bond Retirement Discount on Bonds Payable CashStep by Step Solution
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