Southwest Corporation issued bonds with the following details: Face value: $646,000 Interest: 9.0 percent per year payable each December 31 Terms: Bonds dated January 1, 2021, due five years from that date The annual accounting period ends December 31. The bonds were issued at 104 on January 1, 2021, when the market interest rate was 8.0 percent. Assume the company uses effective-Interest amortization and adjusts for any rounding errors when recording interest expense in the final year. Required: 1. Compute the cash received from the bond issuance in dollars. TIP: The issue price typically is quoted at a percentage of face value. 2. & 3. Prepare the journal entry to record the issuance of the bonds and the payment of interest on December 31, 2021 and 2022. 4-a. How much interest expense would be reported on the income statements for 2021 and 2022? 4-b. Compute the bond value which should be reported on the balance sheets at December 31, 2021 and 2022. X Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Lumpiele Les question Vy enemmy your answers in LTC Laus Veluw. Req 1 Req 2 and 3 Req 4A Req 4B Prepare the journal entry to record the issuance of the bonds and the payment of interest on December 31, 2021 and 2022. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Round your answers to the nearest whole dollar.) No Date General Journal Debit Credit 1 January 01, 2021 Cash 671,840 646,000 Bonds Payable Premium on Bonds Payable 25,840 2 December 31, 202 Interest Expense 53,747 Premium on Bonds Payable 4,393 Cash 58,140 3 December 31, 202 Interest Expense 49,447 X Premium on Bonds Payable 8,693 Cash 58,140 Rea 1 Reg AA > Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Req 4A Req 4B How much interest expense would be reported on the income statements for 2021 and 2022? (Round your answers to the nearest whole dollar.) 2021 2022 Interest Expense 53,747 $ 49,447 x 70. IUW MULTIRILCICIE CAPCHSC WUulu WC IPUILCU UHI LIIC CHIC OLULCHRICIILS FUI LULINIU LULL: 4-b. Compute the bond value which should be reported on the balance sheets at December 31, 2021 and 2022. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg 1 Req 2 and 3 Req 4A Req 4B Compute the bond value which should be reported on the balance sheets at December 31, 2021 and 2022. (Round your intermediate calculations and final answers to the nearest whole dollar.) SOUTHWEST CORPORATION Balance Sheet (partial) 2021 2022 Long-term Liabilities Bonds Payable Premium on Bonds Payable S $ 646,000 21,447 646,000 12.754 X Carrying Value $ 667,447 $ 658,754 RAGA Prey 10 nf 15 Next
