Question 6

PA10-6 (Supplement 10A) Recording Bond Issue, Interest Payments (Straight-Line Amortization), and Early Bond Retirement [LO 10-S1) On January 1, 2018, Loop Raceway Issued 510 bonds, each with a face value of $1,000, a stated Interest rate of 6 percent paid annually on December 31, and a maturity date of December 31, 2020. On the issue date, the market interest rate was 7 percent, so the total proceeds from the bond issue were $496,617. Loop uses the straight-line bond amortization method and adjusts for any rounding errors when recording Interest in the final year, Required: 1. Prepare a bond amortization schedule 2.5. Prepare the journal entries to record the bond issue, the interest payments on December 31, 2018 and 2019, the interest and face value payment on December 31, 2020 and the bond retirement Assume the bonds are retired on January 1, 2020, at a price of 97 Complete this question by entering your answers in the tabs below. Reg1 Red 2 to 5 Prepare a bond amortization schedule, Changes During the Period Ending Bond Liability Balances Period Ended Cash Paid Discount Amortired Interest Expense Bonds Payable Dincount on Bonde Payable Carrying Value 5 0 $ 0 01/01/18 12/31/18 12/31/19 12/31/20 0 0 0 0 0 Rey Reg 2 to 5 > Reg 1 Reg 2 to 5 Prepare the journal entries to record the bond issue, the interest payments on December 31, 2018 and 2019, the interest and face value payment on December 31, 2020 and the bond retirement. Assume the bonds are retired on January 1, 2020, at a price of 97. (If no entry is required for a transaction/event, select "No Journal Entry Required in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 5 Record the issuance of 510 bonds at face value of $1,000 each for $496,617. Note: Enter debits before credits Date General Journal Debit Credit Jan 01, 2018 Record entry Clear entry View general Journal 2 Record the interest payment on December 31, 2018. 96,617. 3 Record the interest payment on December 31, 2019. SS 4 Record the interest and face value payment on December 31, 2020. Credit 5 Record the retirement of the bonds at a quoted price of 97, assuming the bonds are retired on January 1, 2020. Note : journal entry has been entered Record entry Clear entry View general journal