Question
The other question on here that was answered was incorrect and did not lay out the steps for computing everything well. Please explain all parts
The other question on here that was answered was incorrect and did not lay out the steps for computing everything well. Please explain all parts of where to get the numbers for the calculations from. I've reworked this thing so many times and am lost!
During 2020 and 2021, Kale Co. completed the following transactions relating to its bond issue. The companys fiscal year ends on December 31. *(correct parts in italics)*
2020
Mar. | 1 | Issued $350,000 of 10 year, 6 percent bonds for $341,000. The semiannual cash payment for interest is due on March 1 and September 1, beginning September 2020. | |
Sept. | 1 | Recognized interest expense including the amortization of the discount and made the semiannual cash payment for interest. | |
Dec. | 31 | Recognized accrued interest expense including the amortization of the discount. |
2021
Mar. | 1 | Recognized interest expense including the amortization of the discount and made the semiannual cash payment for interest. | |
Sept. | 1 | Recognized interest expense including the amortization of the discount and made the semiannual cash payment for interest. | |
Dec. | 31 | Recognized accrued interest expense including the amortization of the discount. |
Prepare the liabilities section of the balance sheet at December 31, 2020 and 2021.
Determine the amount of interest expense Kale would report on the income statements for 2020 and 2021.
Determine the amount of interest Kale would pay to the bondholders in 2020 and 2021.
Liabilities | Year 1 | Year 2 |
---|---|---|
Interest Payable | ||
Bonds Payable | ||
*Less: Discounts on Bonds Payable* | *8250* | *7350* |
Year 1 | Year 2 | |
---|---|---|
Interest Expense | ||
Interest Paid | *10,500* |
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