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CALCULATOR FULL SCREEN PRINTER VERSION BACK NEX Exercise 14-5 Ayayal Company issued $552,000 of 10%, 20-year bonds on January 1, 2017, at 102, Interest is payable semiannually on Assume an effective yield of 9.7705%. July 1 and January 1. Ayayai Company uses the effective-interest method of amortization for bond premium or discount. Prepare the journal entries to record the following. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548. If no entry is required, select No Entry for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) (b) (c) The issuance of the bonds The payment of interest and related amortization on July 1, 2017. The accrual of interest and the related amortization on December 31, 2017.
ai ul lelest ad the related amortization on December 31, 2017 Date Account Titles and Explanation Debit Credit ㄈ 12/31/17
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solution: Account title cash-552000 102% Bonds payable Premium on bonds payable Date Debit Credit 563,040 552,000 11,040 7/1/17.Interest expense (563040*9.7705% 1/2 27,506 94 Premium on bonds payable Cash (552000*1096*1/2) 27,600 12/31/17. Interest ex (563040-94) 9.7705% 1/2 27,501 Premium on bonds payable Interest payable (552000*1096*1/2) 27,600 4 Sheet1 147 Sheet1 148 Sheet1 149 Sheet1 150 Sheet1 151 Sheet1 152 Sheet1 153 | Steet! 154 ENG UK 22/01/2019 20:36

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