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Please help solve! I am taking Accounting in Health Care HCS/380. P10-10A Prepare journal entries to record issuance of bonds, payment of interest, and amortization
Please help solve! I am taking Accounting in Health Care HCS/380.
P10-10A Prepare journal entries to record issuance of bonds, payment of interest, and amortization of bond disc using effective interest method On January 1, 2014, Lock Corporation issued $1,800,000 face value, 5%, 10 year bonds at $1,667,518. This price an effective interest rate of 6% on the bonds. Lock uses the effective-interest method to amortize bond premium The bond pay annual interest January 1. Instructions (Round all computations to the nearest dollar.) (a) Prepare the journal entry to record the issuance of the bonds on January 1, 2014. (b) Prepare an amortization table through December 31, 2016 (three interest periods) for this bond issue. (c ) Prepare the journal entry to record the accrual of interest and the amortization of the discount on Decem (d) Prepare the journal entry to record the payment of interest on January 1, 2015. (e ) Prepare the journal entry to record the accrual of interest and the amortization of the discount on Decem NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . (a) 2014 Jan 1 Account Account Account (b) (c ) LOCK CORP. Bond Discount Amortization Effective-Interest-Method - Annual Interest Payments 5% Bonds issued at 6% (A) (B) (c ) (D) Interest Discount Unamortized Annual Interest Interest to Expense to Amortization Discount Periods Be Paid Be Recorded (B) - (A) (D) - (C ) Issue date Value 1 $90,000 ? ? ? 2 90,000 ? ? ? 3 90,000 ? ? ? 2015 Dec 31 Account Account Account (d) 2015 Jan 1 Account Account (e ) 2015 Dec 31 Account Account Account interest, and amortization of bond discount 0 year bonds at $1,667,518. This price resulted in est method to amortize bond premium or discount. nuary 1, 2014. nterest periods) for this bond issue. amortization of the discount on December 31, 2014. ary 1, 2015. amortization of the discount on December 31, 2015. or a formula in cells with a "?" . Value Value Value ayments (E ) Bond Carrying Value $1,800,000 - D) $1,667,518 ? ? ? Value Value Value Value Value Value Value ValueStep by Step Solution
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