SpringFit Corporation Bonds Payable 20Y5 Journal Entries Final Questions SpringFit Corporation DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LABILITIES Jan. 1 Cash 1,008,960.00 Premium on Bonds Payable 58,960.00 Bonds Payable 950,000.00 Jun. 30 Interest Expense 18,427.00 Premium on Bonds Payable 2,948.00 Cash 21,375.00 Jul. 1 Cash 1,921,280.00 Discount on Bonds Payable 78,720.00 Bonds Payable 2,000,000.00 Oct. 1 Cash 1,100,000.00 10 1,100,000.00 Notes Payable 11 18,427.00 Interest Expense Dec. 31 12 2,948.00 Premium on Bonds Payable 13 SpringFit Corporation Bonds Payable 20Y5 Journal Entries Final Questions SpringFit Corporation 000000or' Notes Payable 11 1,100,000.00 12 Dec. 31 Interest Expense 18,42700 Premium on Bonds Payable 13 2,948.00 Cash 14 21,375.00 Interest Expense 31 15 16,500.00 Interest Payable 16 16,500.00 Interest Expense 31 17 41,560.00 Discount on Bonds Payable 18 6,560.00 Cash 35,000.00 19 Income Summary 31 94,914.00 20 94914.00 Interest Expense 21 Shaded cells have feedbackX Review the journal entries on the SpringFit Corporation panel, then answer the following questions. 1. Assuming that no bonds had been issued prior to 20Y4, how many different bonds appear in the journal entries for this year? 2. Which entry shows bonds issued at a contract rate lower than the market rate of interest? Choose the date. July 1 V 3. How much interest was paid during the year on the bonds in question (2)? s 4. What is the carying amount of the bonds in question (2) at the end of the year?s 5. Which entry shows bonds that sold for more than their face ambunt? Choose the date. Jan. 1 V 6. How much interest was paid during the year on the bonds in question (5)? $42,750 7. Assuming that straight-line amortization is used for the bonds in (5), what is the bond ife? 10 years 8. What is the carrying value of the bonds in question (5) at the end of the year?s 9. Considering only the 20Y4 journal entries, how much interest was probably accrued on the note payable issued during the year? Dieenunt.an Rande Duhla SpringFit Corporation Bonds Payable Shaded cells have feedback. X 20Y5 Journal Entries DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS UABILITIES Jun. 30 Interest Expense 18,427.00 Premium on Bonds Payable 2,948.00 3. Cash 21,375.00 Interest Expense 4. 30 41,560.00 Discount on Bonds Payable 6,560.00 Cash 35,000.00 Bonds Payable 30 2,000,000.00 Gain on Redemption of Bonds 41,000.00 Discount on Bonds Payable 65,600.00 10 Cash 1,893,400.00 20Y5 Journal Entries Shaded cells have feedback 11 Sep. 30 Interest Expense 49,500.00 12 Interest Payable 16,500.00 13 Notes Payable 251,451.00 14 Cash 317451.00 Dec. 31 15 Interest Expense 12,728.00 16 Interest Payable 12,728.00 17 31 Interest Expense 18,427.00 Premium on Bonds Payable 18 2,948.00 19 Cash 21,375.00 Income Summary 20 31 140,642.00 Shaded cells have feedback. X 20Y5 Journal Entries Cipenae 18 Premium on Bonds Payable 2,948.00 19 Cash 21,375.00 20 31 Income Summary 140,642.00 Interest Expense 21 140,642.00 Bonds Payable 22 31 475,000.00 Premium on Bonds Payable 23 23,584.00 24 Loss on Redemption of Bonds 20,600.00 Cash 25 519,184.00 Shaded cells have feedback X Considering the journal entries for both years, answer the following questions. 1. What is the yearly payment amount required for the note payable? (Assume it is an instaliment note.) s 2. What is the interest rate on the note payable? 3. Were the bonds in the entry on Dec. 31 of 20Y5 redeemed at maturity? No 4. You suspect there is an error in one of the bond redemption entries. Assuming that the amounts are correct, which entry is questionable? v Why? There is no error. Both entries are correct. None of these answers is correct. 5. Why do some bonds sell below face value? Points 4/6 6. Which of the following items are amortized? Check all that apply