Question 1: (7.5 points): A1, B1, D3

At the beginning of 2020 a 5 years bonds are issued at face value of $200,000, with a stated interest rate of 10%. Interest paid annually on Dec. 31.

Instruction:

1- Calculate the premium/Discount of the bonds, if the market interest rate was 5%. (2.5 Points)

2- Prepare the Amortization schedule for premium/Discount if any. (2.5 Points)

3- Prepare journal entries for 2020. (2.5 Points)

Question 2: (7.5 points):C1, C3, D3

The records of Jalal company show the following amortizations schedule:

Date	Cash paid 10%	Interest Exp.20%	Dis/ Pre Amortization	Carrying value
1/1/2020				$184,885
31/12/2020	$30,000	36,977	6,977	$191,862
31/12/2021	$30,000	38,372	8,372	$200,234
31/12/2022	$30,000	40,047	10,047	$210,281
31/12/2023	$30,000	42,056	12,056	$222,338
31/12/2024	$30,000	44,468	14,468	$236,805
31/12/2025	$30,000	47,361	17,361	$254,166
31/12/2026	$30,000	50,833	20,834	$275,000
31/12/2027	$30,000	55,000	25,000	$300,000

At the end of 2024, the company recalled the bonds by 110% of its face value and the recalling expenses were $20,000.

Instructions:

1- Calculate the recalling Cost. (2.5 Points)

2- Calculate the recalling gain or loss. (2.5 Points)

3- Prepare Journal entry at Dec. 31, 2024 (Date of recall)(2.5 Points)

note : please do not answer the question on paper