Question

Hillside issues $1,700,000 of 8%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31 The bonds are issued at a price of $2,080,794 Required 1. Prepare the January 1, 2017, journal entry to record the bonds' issuance 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line premium amortization. 2(c) For each semiannual period, complete the table below to calculate the bond interest expense 3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life 4. Prepare the first two years of an amortization table using the straight-line method 5. Prepare the journal entries to record the first two interest payments. Answer is not complete Complete this question by entering your answers in the tabs below Req 1 Req 2A to 2C Req 3 Req 4 Req 5 Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life Total bond interest expense over life of bonds Amount repaid: 30payments of Par value at maturity Total repaid Less amount borrowed Total bond interest expense 1,700,000 1,700,000 2,080,794 $ (380,794) Req 2A to 2C Req 4

Please help me with the remaining questions I have left

Answer 1

Par maturity value =1700000

Annual value =8%

Semi annual cash payment (1700000*8%*6/12)=68000

Total bond interest expense over life of bonds
	Amount repaid
	30	payments of		68,000	2,040,000
		par value at maturity			1,700,000
	Total repaid				3,740,000
	Less amount borrowed				2,080,794
	Total bond interest expense.				1,659,206

Par (maturity) value Bonds price Premium on Bonds Payable(1700000-2080794) 1,700,000 2,080,794 380794 12693 Straight line premium amortization(380794/30)
Unamortized premium on 6/30/2017 =380794-12693=368101,similar calculation is applied for remaining columns ie, unamortized premium less straight line premium amortization. In the case of carrying value also same logic is used.

Date	General Journal	Debit	Credit
Jun 30, 2017	Bond interest expense	55,307
	Premium on bonds payable	12693
	Cash		68000
Dec 31, 2017	Bond interest expense	55307
	Discount on bonds payable	12693
	Cash		68000

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