Question

P10 LO 14.3 face value b Umption of Effective Interest Rate On June 30, 2017 face value bonds for S761,150.96. On December 31, 2019, Gaston $734,645.28. The bonds were dated January 1, 2019, pay 30, and are due December 31, 2026. E UF the bonds and debt issuance costs Kate On June 30, 2019, Gaston Corporation sold $800,000 of 11% er 31, 2019, Gaston sold $700,000 of this same bond issue for nuary 1, 2019, pay interest semiannually on each December 31 and June Required: Compute the effective yield rate on each issuance of Gaston's 11% bonds P14-3 3 Amortizing Debt Issuance Costs and Bond Premiums On $100,000 of 5-year bonds due December 31, 2023, for $103,00 bonds carry a stated rate of interest of 13% payable annually The company uses the effective interest method of amortization to amort straight-line method to amortize the debt issuance costs. Costs and Bond Premiums On January 1, 2019, Gates Corporation issued December 31, 2023, for $103.604.79 minus debt issuance costs of $3,000. The rest of 13% payable annually on December 31 and were issued to yield 12% of amortization to amortize any discounts or premiums and the Required: Prepare the journal entries to record the issuance of the bonds, all the interest payments and premium amortization schedule for the bonds. s amortizations, and the repayment of the bonds. In addition, prepare a bond interest expense 144 Premium Amortization Schedule with Retirement Before Maturity Hillis Corporation issued 5000. 00 10 14.5 13% bonds on January 1, 2019, for $614,752.24. The bonds are due December 31, 2021, were issued to yield 10148122, and pay interest semiannually on June 30 and December 31. Hillis uses the effective interest method y Required: Prepare a bond interest expense and premium amortization schedule, 2. Assume the company retired the bonds on September 30, 2021, for $630,000, which includes accrued inter est Prepare the journal entry to record the bond retirement, 71 Comprehensive Bats Corporation issued $800,000 of 12% face value bonds for 5851,705.70. The bonds were 10145 dated and issued on April 1. 2019. are due March 31, 2023, and pay interest semiannually on September 30 ang 0146 March 31. Bats sold the bonds to yield 10% Required: Prepare a bond interest expense and premium amortization schedule using the straight-line method 2. Prepare a bond interest expense and premium amortization schedule using the elective mterest method

question 14-4

Answer 1

Amortization Schedule

Date	Opening Principal	Opening Surplus	Interest		Interest paid	Closing Principal
Jan 1,2019	614752	14752
Jun 30,2019	614752		36885		600000*13%/2=39000	612637
Dec 31,2019	612637		36758		39000	610395
Jun 30,2020	610395		36624		39000	608019
Dec 31,2020	608019		36481		39000	605500
June 30,2021	605500		36330		39000	602830
Dec 31,2021	602830		36170		39000	600000