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Premiere Autoparts Inc. issued $180,000 of 6%, 10-year bonds at a price of 87 on January 31, 2017. The market interest rate at the date
Premiere Autoparts Inc. issued $180,000 of 6%, 10-year bonds at a price of 87 on January 31, 2017. The market interest rate at the date of issuance was 8%, and the standard bonds pay interest semi-annually. 1. Prepare an effective-interest amortization table for the bonds through the first three interest payments. 2. Record Premiere's issuance of the bonds on January 31, 2017, and payment of the first semi-annual interest amount and amortization of the bonds on July 31, 2017. Explanations are not required. 1. Prepare an effective-interest amortization table for the bonds through the first three interest payments. (Round your answers to the nearest whole dollar.) Premiere Autoparts Amortization Table Interest Expense (4% of Preceding Bond Carrying Amount) Bond Discount Amortization (B-A) Bond Discount Account Balance (Preceding D-C) Bond Carrying Amount ($180,000 -D) Interest Payment Semi-annual (3% of Interest Date Maturity Value) Jan 31, 2017 July 31, 2017 CC Jan 31, 2018 July 31, 2018 DC C CC C CC 2. Record Premiere's issuance of the bonds on January 31, 2017, and payment of the first semi-annual interest amount and amortization of the bonds on July 31, 2017. (Record debits first, then credits. Explanations are not required.) Start by recording the issuance of bonds on January 31, 2017 Journal Entry Accounts Debit Credit 2017 Jan 31 Now, record the payment of the first semi-annual interest amount and amortization of the bonds on July 31, 2017 Journal Entry Accounts Debit Credit 2017 July 31
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