Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Solar Energy Inc. issued a $903,000, 6.5%, five-year bond on October 1, 2020. Interest is paid annually each October 1. Solar's year end is December
Solar Energy Inc. issued a $903,000, 6.5%, five-year bond on October 1, 2020. Interest is paid annually each October 1. Solar's year end is December 31. Period Ending Cash Interest Paid Period Interest Expense Discount Amort. Oct. 1/20 Oct. 1/21 Oct. 1/22 Oct. 1/23 Oct. 1/24 Oct. 1/25 $ 58,695 58,695 58,695 58,695 58,695 $293,475 $ 64,985 65,457 65,964 66,509 67,095 $330,010 $ 6,290 6,762 7,269 7,814 8,400 $36,535 Un amortized Discount $36,534 30, 244 23,483 16,214 8,400 Carrying Value $866,466 872, 756 879,517 886,786 894,600 903,000 Assume that interest has already been paid on October 1, 2023 Required: Using the amortization schedule provided above, record the entry to retire the bonds on October 1, 2023. for cash of: a. $882.500 b. 5886,786 c$889.900 Solar Energy Inc. issued a $903,000, 6.5%, five-year bond on October 1, 2020. Interest is paid annually each October 1. Solar's year end is December 31. Period Ending Cash Interest Paid Period Interest Expense Discount Amort. Oct. 1/20 Oct. 1/21 Oct. 1/22 Oct. 1/23 Oct. 1/24 Oct. 1/25 $ 58,695 58,695 58,695 58,695 58,695 $293,475 $ 64,985 65,457 65,964 66,509 67,095 $330,010 $ 6,290 6,762 7,269 7,814 8,400 $36,535 Un amortized Discount $36,534 30, 244 23,483 16,214 8,400 Carrying Value $866,466 872, 756 879,517 886,786 894,600 903,000 Assume that interest has already been paid on October 1, 2023 Required: Using the amortization schedule provided above, record the entry to retire the bonds on October 1, 2023. for cash of: a. $882.500 b. 5886,786 c$889.900
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started