Question 38 On January 1, 2018, Irik Corporation issued $1,850,000 face value, 7%, 10-year bonds at $1,725,863. This price resulted in an effective interest rate of 8% on the bonds. The bonds pay annual interest, cach January 1. Prepare the journal entry to record the issue of the bonds on January 1, 2016. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Jan. 1. 2018 SHOW LIST OF ACCOUNTS Prepare an amortization table through December 31, 2021 (three interest periods) for this bond issue. December 31 is the company's year end. (Round answers to the nearest whole dollar, e.g. 5,275.) IRIK CORPORATION Bond Discount Amortization Effective-Interest Method - Annual Interest Payments Interest Annual Interest Discount Unamor Bond Interest Expense to Be Amor- tized Carrying to Be Periods Paid tization Discount Amount Recorded Issue date-Jan. 1/18 1 - Jan. 1/19 2. Jan. 1/20 3. Jan. 1/21 SHOW LIST OF ACCOUNTS Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, 2018. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to the nearest whole dollar, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Dec 31, 2018 Prepare the journal entry to record the payment of interest on January 1, 2019. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to the nearest whole dollar, e.. 5,275.) 1, . Date Account Titles and Explanation Debit Credit Jan. 1, 2019 SHOW LIST OF ACCOUNTS Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, 2019. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to the nearest whole dollar, e.g. 5,275.) Account Titles and Explanation Debit Credit Date Dec 31, 2019 SHOW LIST OF ACCOUNTS List of Accounts Question 38 Accounts Payable Accounts Receivable Accumulated Depreciation - Equipment Administrative Expenses Allowance for Doubtful Accounts Bad Debts Expense Bank Loan Payable Bonds Payable Buildings Cash Common Shares Cost of Goods Sold CPP Payable Current Portion of Bank Loan Payable Current Portion of Mortgage Payable Depreciation Expense Dividends Declared EI Payable Employee Benefits Expense Employee Income Tax Payable Equipment Income Tax Expense Income Tax Payable Insurance Expense Interest Expense Interest Payable Interest Receivable Interest Revenue Inventory Land Mortgage Payable No Entry Notes Payable Notes Receivable Pension Payable Prepaid Insurance Prepaid Property Tax Property Tax Expense Property Tax Payable Provisions Retained Earnings Salaries Expense Sales Sales Tax Payable Service Revenue Unearned Revenue Vehicles
