WEEK SIX

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Ike issues $100,000 of 13%, three-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. They are issued at $102,462. Their market rate is 12% at the issue date.

Required:
1.	Prepare the January 1, 2015, journal entry to record the bonds' issuance.

No	Date	General Journal	Debit	Credit
1	Jan 01, 2015	Cash
1		Bonds payable
1		Premium on bonds payable

2.	Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.

Total bond interest expense over life of bonds:
Amount repaid:
	payments of
Par value at maturity
Total repaid			0
Less amount borrowed
Total bond interest expense			$0

3. Prepare an effective interest amortization table for the bonds' first two years. (Enter all amounts positive values.)

Semiannual Interest Period-End	Cash Interest Paid	Bond Interest Expense	Premium Amortization	Unamortized Premium	Carrying Value
01/01/2015
06/30/2015
12/31/2015
06/30/2016
12/31/2016

4.	Prepare the journal entries to record the first two interest payments.

No	Date	General Journal	Debit	Credit
1	Jun 30, 2015	Bond interest expense
1		Premium on bonds payable
1		Cash
2	Dec 31, 2015	Bond interest expense
2		Premium on bonds payable
2		Cash

5.	Prepare the journal entry to record the bonds' retirement on January 1, 2017, at 98.

No	Date	General Journal	Debit	Credit
1	Jan 01, 2017	Bonds payable
1		Cash

PLEASE FILL IN THE BLANK CORRECTLY WITH ANSWERS COMPLETE! THANK YOU