Problem 10-1A Straight-Line: Amortization of bond discount LO P2 Hillside issues $1,100,000 of 9%, 15-year bonds dated January 1, 2019, that pay interest semiannually on June 30 The bonds are issued at a price of $950,524. Required: 1. Prepare the January 1 journal entry to record the bonds issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization. 2(c) For each semiannual period, complete the table below to calculate the bond interest expense. 3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 4. Prepare the first two years of a straight-line amortization table. 5. Prepare the journal entries to record the first two interest payments. Complete this question by entering your answers in the tabs below. Req 1 Req 2A to 20 Req3 Req 4 Req 5 Prepare the January 1 journal entry to record the bonds' issuance. View transaction list Journal entry worksheet 1 > Record the issue of bonds with a par value of $1,100,000 cash on January 1, 2019 at an issue price of $950,524. Note: Enter debits before credits. General Journal Debit Credit Date January 01 Complete this question by entering your answers in the tabs below. Req 1 Req 2A to 20 Req3 Req 4 Req 5 For each semiannual period, compute (a) the cash payment, (b) the straight-line discount amortization, and (c) the bond interest expense. 2(a) Par (maturity) value Annual Rate Year Semiannual cash interest payment 2(b) Par (maturity) value Bonds price Discount on Bonds Payable Semiannual periods Straight-line discount amortization 2(c) Semiannual cash payment Discount amortization Bond interest expense 11 Req 1 Req 2A to 20 Req3 Req 4 Reg 5 Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. Total bond interest expense over life of bonds: Amount repaid payments of Par value at maturity Total repaid Less amount borrowed Total bond interest expense 0 $ 0 Reg 1 Req 2A to 20 Req3 Reg 4 Req 5 Prepare the first two years of a straight-line amortization table. Carrying Value Semiannual Period- Unamortized End Discount 01/01/2019 06/30/2019 12/31/2019 06/30/2020 12/31/2020 View transaction list Journal entry worksheet Record the first interest payment on June 30. Note: Enter debits before credits. General Journal Debit Credit Date June 30 Record entry Clear entry View general journal Journal entry worksheet
