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Posted on Sep 13, 2024

When Patey Pontoons issued 6% bonds on January 1, 2024, with a face amount of $680,000, the market yield for bonds of similar risk and

When Patey Pontoons issued 6% bonds on January 1, 2024, with a face amount of $680,000, 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.

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. image text in transcribed

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 PVAD of $1 ) Complete this question by entering your answers in the tabs below. 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. Exercise 14-9 (Algo) Issuance of bonds; effective interest; amortization schedule; financial statement effects [LO14-2] When Patey Pontoons issued 6% bonds on January 1, 2024, with a face amount of $680,000, 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. Complete this question by entering your answers in the tabs below. 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. \begin{tabular}{|c|c|c|c|c|} \hline No & \multicolumn{1}{|c|}{ Date } & \multicolumn{1}{c|}{ General Journal } & Debit & Credit \\ \hline 1 & January 01, 2024 & Cash & 572,312 & \\ \hline & & Discount on bonds payable & 107,688 & \\ \hline & \multicolumn{1}{|c|}{ Bonds payable } & & 680,000 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|} \hline No & \multicolumn{1}{|c|}{ Date } & \multicolumn{1}{c|}{ General Journal } & Debit & Credit \\ \hline 1 & June 30, 2024 & Interest expense & 31,477 & \\ \hline & & Cash & & 20,400 \\ \hline & & Discount on bonds payable & & 11,077 \\ \hline \end{tabular}