Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Pharoah Company sold $3,260,000, 9%, 10-year bonds on January 1, 2017. The bonds were dated January 1, 2017, and pay interest on January 1. The
Pharoah Company sold $3,260,000, 9%, 10-year bonds on January 1, 2017. The bonds were dated January 1, 2017, and pay interest on January 1. The company uses straight-line amortization on bond premiums and discounts. Financial statements are prepared annually.
Prepare the journal entries to record the issuance of the bonds assuming they sold at: (1) 102 and (2) 95. ( indent manually.) No. Date Account Titles and Explanation Debit Credit 1/1/17 Cash 3,325,200 65,200 Premium on Bonds Payable 3,260,000 Bonds Payable 2. 1/1/17 Cash 3,097,000 163,000 Discount on Bonds Payable 3,260,000 Bonds Payable Prepare amortization table for issuance of the bonds sold at 102 for the first three interest payments Annual Interest Interest to Interest Expense PremiumUnamortized PeriodsBe Paidto Be Recorded Amortization Premium Carrying Value Bond 3,325,200 65,200 Issue date 286, 6,520 1 58,680 L 3,318,680) 293,400 293 400 293,400 3,312,160 52,160 2 6,520 286.880 3.305,640 45,640 3 286,880 6.520 Prepare amortization table for issuance of the bonds sold at 95 for the first three interest payments Annual Periods Issue date Aterest Interest to Interest Expense Discount unamortized Bond DiscountCarrying Value 3,097,000 3,113,300 3,129,600 3,145,900 Amortization to Be Recorded Be Paid 163,000 146,700 16,300 309,700 293 400 130,400 161300 309,700 2 293,400 293,400 -309,70 16,300 -114,100 - 3 Account Titles and Explanation Debit Credit Date No. 12/31/17 interest Expense 286,880 Premium on Bonds Payable 6,520 293,400 Interest Payable 2. 12/31/17 Interest Expense 309,700 16,300 Discount on Bonds Payable 293,400 Interest Payable Show the long-term liabilities balance sheet presentation for issuance of the bonds sold at 102 at December 31, 2017 PHAROAH COMPANY Balance Sheet (Partial) Show the long-term liabilities balance sheet presentation for issuance of the bonds sold at 95 at December 31, 2017. PHAROAH COMPANY Balance Sheet (Partial)Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started