Only questions 6-8 please! 1-5 are provided.
Name: Blayden Phillips Section: 3 Bond Bonus Problem Due: Tuesday, April 26 (start of class) Instructions: Problem is to be worked independently. All parts, excluding part 4, should be neatly handwritten in pencil and all work shown. January 1, 2022: Excel Corporation issued 15 year, 12% bonds with a face value of $3,550,000. The bonds were sold to yield 11%. Interest is payable annually on January 1. 1. What is the issue price of the bonds? 3,556900 .0.12 - 426000-7.19087 -3863311 $ 3805,261 (Show'calculation or financial calculator inputs.) 3,550,000 0.20900 741950 38052617 2. Record the bond issuance on 1/1/22. Accounts Debit Credit Cash 38052617 Premium an Bonds Payable 25.5aGF Bonds payable 13550,000 3. Assume the company prepares financial statements annually on December 31. Prepare the appropriate adjusting entry for December 31, 2022 for interest and for amortization of the discount or premium if the company used straight-line amortization. 12/31/22 Accounts Debit Credit 1408.983 17017 | 436000 For the remainder of the problem, assume effective interest method of amortization is used. Interest Expense Premium on Bonds punable Interest payable 4. Using EXCEL, prepare an amortization table for the entire bond term. Table should be properly labeled and neatly presented on one page. Amounts should have commas and be rounded to the nearest dollar. Print and attach the table to this paper. HINTS: For the Date Column, you can use the EDATE Function to easily add 12 months to your starting date and copy down to create labels for each row. To avoid rounding differences, use the PV function to calculate your initial present value (carrying value) on the issue date. Set up formulas for each cell and round all amounts to the nearest dollars (do not manually compute and key in amounts). Credit 5. Repeat Question 3. using the effective interest amortization. 12/31/22 Accounts Debit Interest Expense 1418,580 Premium on Bonds Payable Cash 12 420 426000 6. Instead of the entry in part 5., assume that Excel Corporation prepares financial statements quarterly. Prepare the appropriate adjusting entry for March 31, 2022 for interest and for amortization of the discount or premium (under effective interest method). 3/31/22 Accounts Credit Debit 7. What accounts related to this bond would be shown on the March 31, 2022 balance sheet? Show accounts and amounts in the proper sections. Balance Sheet Liabilities Current Liabilities Long-term Liabilities 8. On January 1, 2030, Excel Corporation paid the interest payment due on that date and then called all the bonds at 99. What is the amount of gain or loss on this call? $ Gain or Loss (circle one). Show computation. Prepare all necessary journal entries for the last interest payment and call of the bonds. January 1, 2030 Accounts Debit Credit
