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Use the following information for the Problems below. (Algo)

[The following information applies to the questions displayed below.]

Hillside issues $1,500,000 of 6%, 15-year bonds dated January 1, 2020, that pay interest semiannually on June 30 and December 31.

Problem 10-1A (Algo) Straight-Line: Amortization of bond discount LO P2

The bonds are issued at a price of $1,296,168.

Required:

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

2(a) For each semiannual period, complete the table belowto calculate the cash payment.

2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization.

2(c) For each semiannual period, complete the table below to calculate the bond interest expense.

3.Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.

4.Prepar the first two years of a straight-line amortization table.

5.Prepar the journal entries to record the first two interest payments.

Complet this question by entering your answers in the tabs below.

• Req 1

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

1. Record the issue of bonds with a par value of $1,500,000 cash on January 1, 2020 at an issue price of $1,296,168.

• Req 2A to 2C

For each semiannual period, compute (a) the cash payment, (b) the straight-line discount amortization, and (c) the bond interest expense.(Round your final answers to the nearest whole dollar.)

2(a) Par (maturity) value Annual Rate Year Semiannual cash interest payment

$ x % x =

2(b)Par (maturity) value Bonds price Discount on Bonds Payable Semiannual periods Straight-line discount amortization

2(c)Semiannual cash payment Discount amortization Bond interest expense

=

Req 3

Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.

Total bond interest expense over life of bonds:

Amount repaid:

payments of

Par value at maturity

Total repaid 0

Less amount borrowed

Total bond interest expense $0

• Req 4

Prepare the first two years of a straight-line amortization table.(Round your intermediate and final answers to the nearest whole dollar.)

Semiannual Period-End Unamortized Discount CarryingValue

01/01/2020

06/30/2020

12/31/2020

06/30/2021

12/31/2021

Req 5

Prepare the journal entries to record the first two interest payments.(Round your intermediate and final answers to the nearest whole dollar.)

1. Record the first interest payment on June 30.

2. Record the second interest payment on December 31.

Problem 10-7AA (Algo) Computing bond price and recording issuance LO C2

Hartford Research issues bonds dated January 1 that pay interest semiannually on June 30 and December 31. The bonds have a $30,000 par value and an annual contract rate of 10%, and they mature in 10 years. (Table B.1,Table B.2,Table B.3, andTable B.4)(Use appropriate factor(s) from the tables provided. Round all table values to 4 decimal places, and use the rounded table values in calculations.)

Required:

Consider each separate situation.

1.The market rate at the date of issuance is 8%.

(a) Complete the below table to determine the bonds' issue price on January 1.

(b) Prepare the journal entry to record their issuance.

2.The market rate at the date of issuance is 10%.

(a) Complete the below table to determine the bonds' issue price on January 1.

(b) Prepare the journal entry to record their issuance.

3.The market rate at the date of issuance is 12%.

(a) Complete the below table to determine the bonds' issue price on January 1.

(b) Prepare the journal entry to record their issuance.

Complet this question by entering your answers in the tabs below.

• Required 1A

Complete the below table to determine the bonds' issue price on January 1 if the market rate at the date of issuance is 8%.(Round all table values to 4 decimal places.)

Table values are based on:

n =

i =

Cash Flow Table Value Amount Present Value

Par (maturity) value

Interest (annuity)

Price of bonds

• Required 1B

Prepare the journal entry to record their issuance, if the market rate at the date of issuance is 8%.

1. Record the issue of bonds with a par value of $30,000 on January 1. Assume that the market rate of interest at the date of issue is 8%.

January 01

• Required 2A

Complete the below table to determine the bonds' issue price on January 1 if the market rate at the date of issuance is 10%.(Round all table values to 4 decimal places.)

Table values are based on:

n =

i =

Cash Flow Table Value Amount Present Value

Par (maturity) value

Interest (annuity)

Price of bonds

• Required 2B

Prepare the journal entry to record their issuance, if the market rate at the date of issuance is 10%.

JOURNAL ENTRY WORKSHEET

Record the issue of bonds with a par value of $30,000 on January 1. Assume that the market rate of interest at the date of issue is 10%.

January 01

• Required 3A

Complete the below table to determine the bonds' issue price on January 1 if the market rate at the date of issuance is 12%.(Round all table values to 4 decimal places.)

Table values are based on:

n =

i =

Cash Flow Table Value Amount Present Value

Par (maturity) value

Interest (annuity)

Price of bonds

• Required 3B

Prepare the journal entry to record their issuance, if the market rate at the date of issuance is 12%.

Journal entry worksheet

Record the issue of bonds with a par value of $30,000 on January 1. Assume that the market rate of interest at the date of issue is 12%.

January 01