Question

Problem 10-12A On January 1, 2019, Windsor, Inc. issued $2,280,000 face value, 8%, 10-year bonds at $2,133,677. This price resulted in an effective-interest rate of 9% on the bonds. Windsor uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest on January 1. Your answer is partially correct. Try again. Prepare the journal entry to record the issuance of the bonds on January 1, 2019. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1, 2019 Cash 2133677 Discount on Bonds Payable 14632311 Bonds Payable 2280000

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and calculation. For detailed answer refer to the supporting sheet.

A Е F 1 Answer 3 In the given question only the bond amortisation table is not correct 4 5 So, I have prepared the correct bond amortisation table mentioned below 6 7 Windsor, Inc. Bond Discount Amortization 9 10 Effective Interest Method Annual interest Payments Unamortized Discount (Previous Bond Carrying Value (2280000- Discount interest expense to Interest to be paid be reocrded (bond Annual Interest balance of Amortisation (interest expense interest paid) Period unamortized unamotized carrying value*9%) discount discount discount) amortisation) 11 12 Issue Date 146323 2133677 192031 13 1 182400 9631 136692 2143308 14 2. 182400 192898 10498 126194 2153806 15 11443 182400 193843 114751 2165249 16 LL