Question

ed ips down the Amazon River in South America Adnaly the company wasts Wicked Wild Company is considering in additional capital for further expansion The company wants to finance a new business venture into to add another busing on the land to or more services for local customers Cache icon to viewing the financing information) Read the team Requirement 1. Will the bonds is at faceva a premium or a discount? Wicked Wild's bonds will be issued at because Requirement. Record the following transactions include dates and round to the nearest dollar Olaplanations Hound your wwers to the nearest Whole dollar Record debits first the credits Exclude explanations from any journal entries) a. Cash received from the bonds More info Credit Wicked Wild Company plans to raise the capital by sing $1,400,000 Seven-year bonds on January 2 2020 The bonds payer mannly on June and December 1 The company receives $1.397 200 when the bonds are issued The company issues a mortgage payable for $95.000 on January 2.2020 The proceeds from the mortgage will be used to construct the new building The mortgage requires annual payments of $65.000 plus interest for the years payable on December 31 The more interest 10% Choose from any list of enter any number in the mou and men concerto questo Done ASPM 9 ев

Answer 1

1	Wicked wild's bonds will be issued at Discount because Issue price is less than face value
2	Sl No.	Date	Accounts					Debit	Credit
		2020
	a	Jan 2.	Cash					1397200
			Discount on issue of bonds					2800
			Bond payable						1400000
			(Cash received from the bond issue)
	b.	Jan 2.	Cash					975000
			Mortgage payable						975000
			(Cash received from the mortgage payable)
	c.	June 30.	Interest expense					126400
			Discount on issue of bonds			(2800/7)			400
			Cash			(1400000*9%)			126000
			(Semi-annual bond interest payment-Discount
			amortized over the life of the bond)
		Dec 31.	Interest expense					126400
			Discount on issue of bonds			(2800/7)			400
			Cash			(1400000*9%)			126000
			(Semi-annual bond interest payment-Discount
			amortized over the life of the bond)
	d.	Dec 31.	Mortgage payable					65000
			Interest expense			(975000*10%)		97500
			Cash						162500
			(Payment on the mortgage payable)
3				Total 2020 interest expense
	Bonds	(126400+126400)		252800
	Mortgage			97500
	Total			350300