Question
The following amortization and interest schedule reflects the issuance of 10-year bonds by Metlock Corporation on January 1, 2014, and the subsequent interest payments and
The following amortization and interest schedule reflects the issuance of 10-year bonds by Metlock Corporation on January 1, 2014, and the subsequent interest payments and charges. The companys year-end is December 31, and financial statements are prepared once yearly. Amortization Schedule Year Cash Interest Amount Unamortized Carrying Value 1/1/2014 $20,999 $ 83,601 2014 $11,506 $12,540 19,965 84,635 2015 11,506 12,695 18,776 85,824 2016 11,506 12,874 17,408 87,192 2017 11,506 13,079 15,835 88,765 2018 11,506 13,315 14,026 90,574 2019 11,506 13,586 11,946 92,654 2020 11,506 13,898 9,554 95,046 2021 11,506 14,257 6,803 97,797 2022 11,506 14,670 3,639 100,961 2023 11,506 15,145 104,600 (a) Indicate whether the bonds were issued at a premium or a discount. select an option (b) Indicate whether the amortization schedule is based on the straight-line method or the effective-interest method. select a method (c) Determine the stated interest rate and the effective-interest rate. (Round answers to 0 decimal places, e.g. 18%.) The stated rate enter percentages rounded to 0 decimal places % The effective rate enter percentages rounded to 0 decimal places % (d) On the basis of the schedule above, prepare the journal entry to record the issuance of the bonds on January 1, 2014. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit January 1, 2014 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount (e) On the basis of the schedule above, prepare the journal entry to reflect the bond transactions and accruals for 2014. (Interest is paid January 1.) (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit December 31, 2014 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount (f) On the basis of the schedule above, prepare the journal entries to reflect the bond transactions and accruals for 2021. Metlock Corporation does not use reversing entries. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit choose a transaction date enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount choose a transaction date enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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