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Problem 3: Recording Entries for Bonds Following is a partial amortization table for an issue of 10-year bonds on January 1, 2019 Effective Interest Incurred
Problem 3: Recording Entries for Bonds Following is a partial amortization table for an issue of 10-year bonds on January 1, 2019 Effective Interest Incurred Carrying Value End Of Year Contractual Carrying Value at Interest Amortization to be Paidof Principal ear 2019 2020 2021 ginning of Year $2,154,434 $2,142,156 $2,129,264 $107,722 $120,000 $107,108 $120,000 $106,643 $120,000 $12,278 $2,142,156 $12,892 $2,129,264 $13,537 $2,115,727 Place you answer in the shaded boxes below with any computations to the right Required: A. How much were the bonds sold for? B. What is the stated (contractual) rate of interest? C. What is the effective rate of interest? D. Record the entries necessary over the first three years of the life of the bonds for the issuance, retirement and yearly interest accrual You do not need to record the payment of interest. Date Account Title Debit Credit Cash The accounts for the first entry have been entered for you. Enter the amounts and record the remaining entries Start each entry on the line opposite the date Premium on Bonds Payable Bonds Payable 12/31/19 Stay within the established borders 12/31/20 Stay within the boarders Very Important 12/31/21 12/31/28
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