Question 1.
Question 2:
Mahalo Boat Adventure Inc. has a July 31 year-end. It showed the following partial amortization schedules regarding two bond issues: Bond Issue A (A) Cash Interest Paid $740,000 x 12.0% x 6/12 (B) Period Interest Expense (E) X 11.0% x 6/12 (C) Amort. (A) - (B) (D) Unamortized Balance $41,610 40,199 (E) Carrying Value $740,000 + (D) $ 781,610 780,199 $ 44,400 $ 42,989 Period Ending June 1/20 Dec. 1/20 : Dec. 1/26 June 1/27 Dec. 1/27 June 1/28 Dec. 1/28 June 1/29 Totals 44,400 44,400 44,400 44,400 44,400 44,400 $ 799,200 : 41,717 41,569 41,413 41,249 41,076 40,891 $ 757,590 $ 1,411 : 2,683 2,831 2,987 3,151 3,324 3,509 $41,610 15,802 12,971 9,984 6,833 3,509 755,802 752,971 749,984 746,833 743,509 740,000 *Adjusted for rounding (For all requirements, do not round intermediate calculations. Round the final answers to the nearest whole dollar.) f. Show how bond A would appear on the balance sheet under non-current liabilities at July 31, 2026. (Enter all amounts as positive values.) Answer is complete but not entirely correct. Balance Sheet (Partial) Non-current liabilities Bonds payable, 11.0%, due June 1, 2029 $ Add: Premium on bonds payable 740,000 81,400 $ 821,400 g. Calculate the total bond A interest expense that would appear on the income statement for the year ended July 31, 2027. Answer is complete but not entirely correct. Total bond interest expense $ 82,982 X h. Independent of (a) through (g), assume bond A issues were retired on December 1, 2027, at 97. Record the entries Answer is not complete. No Debit Credit 1 X 740,000 X Date General Journal December 01, 202 Bonds payable Gain on retirement of bonds Discount on bonds payable Cash X X Bond Issue B (A) Period Cash Interest Interest Paid Expense $600,000.0 X (E) X 12.5% x 12.0% x 3/12 3/12 (C) Amort. (A) - (B) (D) Unamortized Balance $16,991 16,772 $ Period Ending Apr. 1/18 Jul. 1/18 : Apr. 1/26 Jul. 1/26 Oct. 1/26 Jan. 1/27 Apr. 1/27 Jul. 1/27 Oct. 1/27 Jan. 1/28 Apr. 1/28 Totals $ 18,000 : 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 $ 720,000 $ 18,219 : 18,569 18,586 18,605 18,624 18,643 18,663 18,684 18,705 18,726 $ 736,991 219 : 569 586 605 624 643 663 684 705 726 5,236 4,650 4,045 3,421 2,778 2,115 1,431 726 (E) Carrying Value $600,000 - (D) $ 583,009 583,228 : 594,764 595, 350 595,955 596,579 597,222 597,885 598,569 599,274 600,000 $16,991 *Adjusted for rounding 2. Bond Issue B a. Were the bond B issued at a premium and/or discount? Issued at discount Issued at premium Issued at premium & discount b. Journalize the issuance of bond B on April 1, 2018. X Answer is not complete. No Date General Journal Debit Credit c. What is the contract interest rate for the issue bond B? Contract interest rate % d. Interest of how much is paid how often for bond B issued? Interest paid e. What is the term of bond B issue? Term of each bond issue year term f. Show how bond B would appear on the balance sheet under non-current liabilities at July 31, 2026. Balance Sheet (Partial) Non-current liablities g. Calculate the bond B interest expense that would appear on the income statement for the year ended July 31, 2027. Total bond interest expense h. Independent of (a) through (g), assume that bond B issues was retired on December 1, 2027, at 97. Record the entries. Answer is not complete. General Journal No Date Debit Credit
