Problem 14-05
In each of the following independent cases, the company closes its books on December 31.
Problem 14-05 In each of the following independent cases, the company closes its books on December 31. Bramble Co. sells $470,000 of 8% bonds on March 1, 2020. The bonds pay interest on September 1 and March 1. The due date of the bonds is September 1, 2023. The bonds yield 12%. Give entries through December 31, 2021. Prepare a bond amortization schedule using the effective-interest method for discount and premium amortization. Amortize premium or discount on interest dates and at yearend. (Round answers to 0 decimal places, e.g. 38,548.) Schedule of Bond Discount Amortization Effective-Interest Method Bonds Sold to Yield Carrying Cash Interest Discount Amount of Date Pald Exgense Amortized Bonds 3W\" A: 4:] A: _ 9/1/20 18,800 25,052 5,252 423,777 W21 9/1/21 sum 9'1\"\" was 9/1/23 :1 Prepare all of the relevant journal entries from the time of sale until December 31, 2021. (Assume that no reversing entries were made.) (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places e.g. 58,971. 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 manually.) Dale Account Titles and Explanation Debit Credit 3/1/20 Cash ] ' 417,526] [ Discount on Bonds Payable] r 52,474} [ Bonds Payable 470,000 :1 :1 [: 3:]:[: 311m :1 :1 [: SHOW LIST OF ACCOUNTS Sunland Co. sells $433,000 of 12% bonds on June 1, 2020. The bonds pay interest on December 1 and June 1. The due date of the bonds is June 1, 2024. The bonds yield 8%. On October 1, 2021, Sunland buys back $129,900 worth of bonds for $135,900 (includes accrued interest). Give entries through December 1, 2022. Prepare a bond amortization schedule using the effective-interest method for discount and premium amortization. Amortize premium or discount on interest dates and at year-end. (Round answers to 0 decimal places, e.g. 38,548.) Schedule of Bond Discount Amortization Effective-Interest Method Bonds Sold to Yield Carrying Cash Interest Premium Amount. of Date Paid Exensa Amortized Bonds Ell/2 s[:]$:]$[:]$[:] 1211/20 5/1/21 I J l J [ l l J \"ll/21 :] :1 [Z [:1 W\" [:1 :1 [:1 [:1 12W\" l: :1 [Z :1 \"\"23 :1 E: :1 :] \"ll/23 :1 :J :1 :3 W2\" [:1 :1 [:1 [:1 * Difference due to rouF Prepare all of the relevant journal entries from the time of sale until December 31, 2022. (Assume that no reversing entries were made.) ( Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places e.g. 58,971. 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 manually.) Date Account Titles and Explanation Debit Credit 6/1/20 12/1/20 12/31/20 6/1/21 10/1/21 (To record interest expense and premium amortization) 10/1/21 (To record buy back of bonds) 12/1/21 12/31/21 6/1/22 12/1/22 Click if you would like to Show Work for this question: Open Show Work
