Refer to the bond details in Problem 10-4A (attached photo).

Required:

1. Prepare the January 1 journal entry to record the bonds' issuance.

2. Determine the total bond interest expense to be recognized over the bonds life.

3. Prepare an effective interest amortization table like the one in Exhibit 10B.1 for the bonds' first two years.

4. Prepare journal entries to record the first two interest payments.

J UHUU UU ILIU te nisl two interest payments. Curryy vuIC PLODU Legacy issues $325,000 of 5%, four-year bonds dated January 1. 2019. that pay interest semiannually on June 30 and December 31. They are issued at $292,181 when the market rate is 8%. Problem 10-4A Straight-Line: Amortization of bond discount P2 Required 1. Prepare the January 1 journal entry to record the bonds' issuance. 2. Determine the total bond interest expense to be recognized over the bonds' life. 3. Prepare a straight-line amortization table like the one in Exhibit 10.7 for the bonds' first two years. 4. Prepare the journal entries to record the first two interest payments. Check (2) $97.819 (3) 12/31/2020 carrying value, $308,589 On November 1, 2019, Norwood borrows $200,000 cash from a bank by signing a five-year installment note bearing 8% interest. The note requires equal payments of $50,091 each year on October 31. Problem 10-5A Installment notes EXHIBIT 10B.1 Effective Interest Amortization of Bond Discount (E) Carrying value Bonds: $100,000 Par Value, Semiannual Interest Payments, Two-Year Life, 4% Semiannual Contract Rate, 5.0155% Semiannual Market Rate (A) (B) (C) (D) Cash Bond Semiannual Interest Interest Discount Unamortized Interest Paid Expense Amortization Discount Period-End 4% x $100,000 5.0155% x Prior (E) (B) - (A) Prior (D) - (C) (0) 12/31/2019 $3,600 (1) 6/30/2020 $ 4,000 $ 4,835 $ 835 2,765 (2) 12/31/2020 4,000 4,877 877 1,888 (3) 6/30/2021 4,000 4,921 921 967 (4) 12/31/2021 4,000 4,967 967 $16,000 $19,600 $3,600 - - - -- 500.000 SALONG Carrying Value $100,000 - (D) $ 96,400 97,235 98,112 99,033 100,000 $9112 $97.235 $96.400 Column (A) is the par value ($100,000) multiplied by the semiannual contract rate (4%). Column (B) is the prior period's carrying value multiplied by the semiannual market rate (5.0155%). Column (C) is the difference between interest paid and bond interest expense, or ((B)-(A)]. Column (D) is the prior period's unamortized discount less the current period's discount amortization. Column (E) is the par value less unamortized discount, or ($100,000 - (D)). 12/31/2019 6/30/2020 12/31/2020 6/30/2021 12/31/2021 Bonds Payable 12/31/2019 100,000 6/30/2020 12/31/2020 6/30/2021