Question

des down the Amazon River in South America the company wants Be Bo d y s e bine a n d capital for further expansion The company was the new and to or more Services for local customers Requirement 1. Will the bonds we face value, a premium or a discount Better Boat's bonds will be laudat because include dates and round to the nearest C Requirement 2. Record the following transaction any journal entries) owplanation (Round your awers to the nearest Whole dollar Record debts first, then credits Exchat explanations from a. Cash received from the band 0 More info Accounts Debit Crede r e capital by o $1.000 000 of four year hands on January 2 n d December 31. The company receives Better Boat Company 2020. The bonds payer m $399.00 when the bonds The company he m te wees p The on January 2 2020 The proceed to w ay of the 000 Choose to be heutes and the conte xto Pont Done

Answer 1

Refer to the below images for the above mentioned questions, in a detailed way of solution.

issue at face value, a premium will the bonds a discount 2 cor) peautrement-o. will to Realuiremen at a Answey Boat company's bond Cash proceeds the bonds. will be are less issued than the discount value face of ent : : Journal entries : Reasurement Date particulars Debit exedit 2020 Janai cash Ale or Discount on bonds payable Alcor To Bonds payable Ale $ 1399040 960 $1400000 working : * 1400000-$ 1399040 960 - 350000 Jan a cash ate or To Hortgage payable 1350000 442680 Jone 30 Interest expense ale Dr Go Discount on bonds To cash ALL payable ale & 80 $42.000 Working : Discount on bonds payable - $960 x 1/12 - 80 cash & & 140000 40.oby 6/12 4 42000

$42080 Dec 31 $ 80 $ 42000 Bond interest expense All To Discant on Bonds payable Go cash ale Workings * $960x oli0 = 180 ** $ 1400000 * 0.068 = $ 47000 ale $ 35000 Dec 31 Mortgage payable Interest expense ale To cash Al or or $ 21000* 456000 workI * 4 350.000 X 0.06+3 -9 21000 : of the total interest expense incorred calculation in 2020 Requirement Date Interest expense June 3o & 42080 Bonds Dec 31 42080 Mortgage Dec 31 & 21000 - & 105160 Toral &