You are an accounting intern working for SpringFit Corporation You have recently been assigned to help one of the accountants who is doing an internal audit of the business You will be assisting with a review of the payables issued by SpringFit Corporation Your first task is to review the previous years journal entries, shown as follows Journal Entries, 20Y4 PAGE 15 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST REF DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Jan 1 Cash 1,008,960 00 2 Premium on Bonds Payable 58,960 00 3 Bonds Payable 950,000 00 4 Jun 30 Interest Expense 18,427 00 5 Premium on Bonds Payable 2,948 00 6 Cash 21,375 00 7 Jul 1 Cash 1,921,280 00 8 Discount on Bonds Payable 78,720 00 9 Bonds Payable 2,000,000 00 10 Oct 1 Cash 1,100,000 00 11 Notes Payable 1,100,000 00 12 Dec 31 Interest Expense 18,427 00 13 Premium on Bonds Payable 2,948 00 14 Cash 21,375 00 15 31 Interest Expense 16,500 00 16 Interest Payable 16,500 00 17 31 Interest Expense 41,560 00 18 Discount on Bonds Payable 6,560 00 19 Cash 35,000 00 20 31 Income Summary 94,914 00 21 Interest Expense 94,914 00 Review the journal entries on the SpringFit Corporation panel, then answer the following questions 1 Assuming that no bonds had been issued prior to Year 1, how many different bonds appear in the journal entries for this year 2 Which entry shows bonds issued at a contract rate lower than the market rate of interest Choose the date 3 How much interest was paid during the year on the bonds in question (2) 4 What is the carrying amount of the bonds in question (2) at the end of the year 5 Which entry shows bonds that sold for more than their face amount Choose the date 6 How much interest was paid during the year on the bonds in question (5) 7 Assuming that straight line amortization is used for the bonds in (5), what is the bond life 8 What is the carrying value of the bonds in question (5) at the end of the year

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You are an accounting intern working for SpringFit Corporation. You have recently been assigned to help one of the accountants who is doing an internal

You are an accounting intern working for SpringFit Corporation. You have recently been assigned to help one of the accountants who is doing an internal audit of the business. You will be assisting with a review of the payables issued by SpringFit Corporation. Your first task is to review the previous years journal entries, shown as follows:

Journal Entries, 20Y4

PAGE 15

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1	Jan. 1	Cash	1,008,960.00		?
2		Premium on Bonds Payable		58,960.00		?
3		Bonds Payable		950,000.00		?
4	Jun. 30	Interest Expense	18,427.00				?
5		Premium on Bonds Payable	2,948.00			?
6		Cash		21,375.00	?
7	Jul. 1	Cash	1,921,280.00		?
8		Discount on Bonds Payable	78,720.00			?
9		Bonds Payable		2,000,000.00		?
10	Oct. 1	Cash	1,100,000.00		?
11		Notes Payable		1,100,000.00		?
12	Dec. 31	Interest Expense	18,427.00				?
13		Premium on Bonds Payable	2,948.00			?
14		Cash		21,375.00	?
15	31	Interest Expense	16,500.00				?
16		Interest Payable		16,500.00		?
17	31	Interest Expense	41,560.00				?
18		Discount on Bonds Payable		6,560.00		?
19		Cash		35,000.00	?
20	31	Income Summary	94,914.00				?
21		Interest Expense		94,914.00			?

Review the journal entries on the SpringFit Corporation panel, then answer the following questions.

1.	Assuming that no bonds had been issued prior to Year 1, how many different bonds appear in the journal entries for this year?
2.	Which entry shows bonds issued at a contract rate lower than the market rate of interest? Choose the date.
3.	How much interest was paid during the year on the bonds in question (2)?
4.	What is the carrying amount of the bonds in question (2) at the end of the year?
5.	Which entry shows bonds that sold for more than their face amount? Choose the date.
6.	How much interest was paid during the year on the bonds in question (5)?
7.	Assuming that straight-line amortization is used for the bonds in (5), what is the bond life?
8.	What is the carrying value of the bonds in question (5) at the end of the year?