Question#2:

Carla Vista Corporation issued $330,000 of 5-year bonds on April 1, 2020. Interest is paid semi-annually on April 1 and October 1. Below is a partial amortization schedule for the first few years of the bond issue.

Semi-Annual Interest Period		Interest Payment			Interest Expense			Amortization			Bond Amortized Cost
Apr.1, 2020											$345,217
Oct. 1, 2020		$6,600			$5,178			$1,422			343,795
Apr. 1, 2021		6,600			5,157			1,443			342,352
Oct. 1, 2021		6,600			5,135			1,465			340,887
Apr. 1, 2022		6,600			5,113			1,487			339,400
Oct. 1, 2022		6,600			5,091			1,509			337,891
Apr. 1, 2023		6,600			5,068			1,532			336,359

A). Were the bonds issued at a discount or at a premium?

The bonds were issued at a ___________.

B). What is the bonds face value?

Face value

$___________

C). What will the bonds amortized cost be at the maturity date?

Bond amortized cost

$_____________

D). What will be the total interest payment over the five-year life of the bonds? Total interest expense?

Total interest payment		$__________
Total interest expense		$__________

E). Prepare the journal entry to record the issuance of the bond. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Apr. 1, 2020
	(To record issuance of bonds.)

F). Prepare the journal entry for the first interest payment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Oct. 1, 2020
	(To record interest payment.)

G). Prepare the adjusting journal entry on December 31, 2020, assuming this is Carla Vistas year end. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,125.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2020
	(To accrue interest expense.)

H). Prepare the journal entry for the payment of interest on April 1, 2021. Assume no reversing entries have been used. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Apr. 1, 2021
	(To record interest payment.)