Question
Straight Line: Amortization of bond premium LO P1, P3 Hillside issues $4,000,000 of 6%, 15-year bonds dated January 1, 2015, that pay interest semiannually on
Straight Line: Amortization of bond premium LO P1, P3
Hillside issues $4,000,000 of 6%, 15-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $4,895,980. |
Required: | |
1. | Prepare the January 1, 2015, journal entry to record the bonds issuance. |
2(a) | For each semiannual period, complete the table below to calculate the cash payment.
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2(b) | For each semiannual period, complete the table below to calculate the straight-line premium amortization.
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2(c) | For each semiannual period, complete the table below to calculate the bond interest expense.
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3. | Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.
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4. | Prepare the first two years of an amortization table using the straight-line method. | |||||||||||||||||||||
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5. | Prepare the journal entries to record the first two interest payments. |
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