Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PAIRIER EASION Problem 14-1 BACK) Your answer is partially correct. Try again. The following amortization and interest schedule reflects the issuance of 10-year bonds by

image text in transcribed
image text in transcribed
image text in transcribed
PAIRIER EASION Problem 14-1 BACK) Your answer is partially correct. Try again. The following amortization and interest schedule reflects the issuance of 10-year bonds by Ayayal Corporation on January 1, 2011, and the subsequent interest payments and charges. The company's year-end is December 31, and financial statements are prepared once yearly. Amortization Schedule Amount Carrying Value Year Cash Interest Unamortized 1/1/2011 $16,183 $127,017 2011 $14,320 $15,242 15,261 127,939 2012 14,320 15,353 14,228 128,972 2013 14,320 15,477 13,071 130,129 2014 14,320 15,615 11,776- 131,424 2015 14,320 15,771 10,325 132.875 2016 14,320 15,945 8,700 134,500 2017 14,320 16,140 6,880 136,320 2018 14,320 16,358 4.842 138,358 2019 14,320 16,603 2,559 140,641 2020 14,320 16,879 143,200 (a) Indicate whether the bonds were issued at a prenmum or a discount Discount (b) Indicate whether the amortization schedule is based on the straight-line method or the effective-interest method. Effective interest method e-g. 18%.) aTERMEDTATE ACCOUNTING (EC CALCULATOR vecermine the stated interest rate and the effective-interest rate. (Round answers to STANDARD VIw PRINTER VERSION BACK 0 decimal places, e.g. 18%) The stated rate 11 % The effective rate % (d) On the basis of the schedule above, prepare the journal entry to record the issuance of the bonds on January 1, 2011. (f no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when ameunt is entered. Do not indent manually) Date Account Titles and Explanation Debit Credit January 1, 2011 Cash 14,320 Discount on Bonds Payable Bonds Payable 127,939 (e) On the basis of the schedule above, prepare the journal entry to reflect the bond transactions and accruals for 2011. (Interest is paid January 1.) (If no entry is required, select "No Entry for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manualy.) Debit Credit Date Account Titles and Explanation December 31, 2011 Interest Expense 17,719.00 17,215.00 Interest Payable 504.00 Discount on Bonds Payable () On the basis of the schedule above, prepare the journal entries to reflect the bond transactions and accruals for 2018. Ayayai Corporation does not use reversing entries. (Ifno entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (r) On the basis of the schedule above, prepare the journal entries to reflect the bond transactions and accruals for 2018. Ayayal Corporation does not use reversing entries. (If no required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically Indented when amount is entered. Do not Inde Date Account Titles and Explanation Debit Credit January 1, 2018 Interest Payable 17,215.00 Cash 17,215.00 December 31, 2018 Interest Expense 18,329.00 Interest Payable 17,215.00 Bonds Payable 1,114.00

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

CPA Comprehensive Exam Review Auditing And Attestation

Authors: Nathan M. Bisk

43rd Edition

088128095X, 978-0881280951

Students also viewed these Accounting questions