PA10-8 (Algo) (Supplement 10C) Recording Bond Issue, Interest Payments (Simplified Effective-Interest Amortization), and Early Bond Retirement [LO 10-53] On January 1, 2021, Surreal Manufacturing issued 620 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, 2023. On the issue date, the market interest rate was 4 percent, so the total proceeds from the bond issue were $602,797. Surreal uses the simplified effective-interest bond amortization method and adjusts for any rounding errors when recording interest in the final year. Required: 1. Prepare a bond amortization schedule. 2-5. Prepare the journal entries to record the bond issue, the interest payments on December 31, 2021 and 2022, the interest and face value payment on December 31, 2023 and the bond retirement. Assume the bonds are retired on January 1, 2023, at a price of 103. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 5 Prepare a bond amortization schedule. (Do not round intermediate calculations. Round your answers to the nearest whole dollar. Make sure that the Carrying value equals to face value of the bond in the last period. Interest expense in the last period should be calculated as Cash Interest (+)/(-) Increase in Bonds Payable, Net.) Show less Beginning of Year Changes During the Period End of Year Increase in Bonds Interest Bonds Period Cash Paid Bonds Payable, Net Expense Payable, Net Payable, Net 01/01/21 - 12/31/21 $ 602,797 $ 24,112 $ 18,600 $ 5,512 $ 608,309 01/01/22 - 12/31/22 608,309 24,332 18,600 5,732 614,041 01/01/23 - 12/31/23 620,003 24,561 18,600 5,961 625,964 LLLLLLLLLLLL (Reg 1 Req 2 to 5 > Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 5 Prepare the journal entries to record the bond issue, the interest payments on December 31, 2021 and 2022, the interest and face value payment on December 31, 2023 and the bond retirement. Assume the bonds are retired on January 1, 2023, at a price of 103. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Round your answers to the nearest whole dollar.) Show less View transaction list X > 1 Record the issuance of 620 bonds at face value of $1,000 each for $602,797. 2 Record the interest payment on December 31, 2021. 3 Record the interest payment on December 31, 2022. Credit 4 Record the interest and face value payment on December 31, 2023. Record the retirement of the bonds at a quoted price of 103, assuming the bonds are retired on January 1, 2023. Note : = journal entry has been entered Record entry View general journal Clear entry
