Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

What is the amount(s) related to the bonds that Patey will report in its balance sheet at December 31,2024 and income statement for the year

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed What is the amount(s) related to the bonds that Patey will report in its balance sheet at December 31,2024 and income statement for the year ended December 31, 2024? (Ignore income taxes.) Note: Round intermediate calculations and final answers to the nearest whole dollar. Journal entry worksheet Note: Enter debits before credits. \begin{tabular}{|l|l|l|l|l|} \hline Date & Cash Payment Effective Interest & \begin{tabular}{c} Increase in \\ Balance \end{tabular} & \begin{tabular}{c} Outstanding \\ Balance \end{tabular} \\ \hline 01/01/2024 & & & & \\ \hline 06/30/2024 & & & & \\ \hline 12/31/2024 & & & & \\ \hline 06/30/2025 & & & & \\ \hline 12/31/2025 & & & & \\ \hline 06/30/2026 & & & & \\ \hline 12/31/2026 & & & & \\ \hline 06/30/2027 & & & & \\ \hline 12/31/2027 & & & & \\ \hline Total & & & & \\ \hline \hline \end{tabular} Journal entry worksheet Record the interest expense on December 31, 2027. Note: Enter debits before credits. Record the issuance of the bonds on January 1, 2024. Note: Enter debits before credits. Determine the price of the bonds at January 1, 2024. Note: Round final answers to the nearest whole dollar. Round your percentage answer to one decimal place. Exercise 14-9 (Algo) Issuance of bonds; effective interest; amortization schedule; financial statement effects [LO14-2] When Patey Pontoons issued 10% bonds on January 1, 2024, with a face amount of $800,000, the market yield for bonds of similar risk and maturity was 11\%. The bonds mature December 31, 2027 (4 years). Interest is paid semiannually on June 30 and December 31. Required: 1. Determine the price of the bonds at January 1, 2024. 2. Prepare the journal entry to record their issuance by Patey on January 1, 2024. 3. Prepare an amortization schedule that determines interest at the effective rate each period. 4. Prepare the journal entry to record interest on June 30, 2024. 5. What is the amount related to the bonds that Patey will report in its balance sheet at December 31, 2024 ? 6. What is the amount related to the bonds that Patey will report in its income statement for the year ended December 31 , 2024 ? (Ignore income taxes.) 7. Prepare the appropriate journal entries at maturity on December 31, 2027. Note: Use tables, Excel, or a financial calculator. (FV of \$1, PV of \$1, FVA of \$1, PVA of \$1, FVAD of \$1 and

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Frank Woods Business Accounting

Authors: Frank Wood. Sangster, Alan

12th Edition

0273759280, 9780273759287

More Books

Students also viewed these Accounting questions