Question

Question Help Benny's Hamburgers issued 5%, 10-year bonds payable at 80 on December 31, 2018. At December 31, 2020, Benny reported the bonds payable as follows: (Click the icon to view the bonds payable.) Benny's pays semiannual interest each June 30 and December 31. (Assume bonds payable are amortized using the straight-line amortization method.) Read the requirements Requirement 1. Answer the following questions about Benny's bonds payable: a. What is the maturity value of the bonds? $ i Requirements i Data Table Long-term Liabilities: Bonds Payable 1. Answer the following questions about Benny's bonds payable a. What is the maturity value of the bonds? b. What is the carrying amount of the bonds at December 31, 2020? c. What is the semiannual cash interest payment on the bonds? d. How much interest expense should the company record each year? 2. Record the June 30, 2020, semiannual interest payment and amortization of discount $ 600,000 Less: Discount on Bonds Payable (96.000) $ 504000 Print Done Print Done Enter any number in the edit fields and then click Check Answer A parts Clear AN Check Answer 4 remaining

Answer 1

a(a) Maturity value of Bond :- Face Value of bond + Interest payable at end of period $600,000 +(600000*5%/2)= $615000

1(b) Carring amount of Bond on 31December 2020 will be $600,000, and Liability and Discount on Bond Paybale $96000 will be reported under Asset

1 c.

Part-c

Semi annual cash interest payment (each 6 months) = (600000 * 5% / 2) = $15,000

Part-1(d): Interest Expenses each year to be reported Interest paid each year + Amortisation of Discount Each year 600000*5% + (600000-(600000*80%))/10) = 30000+12000 = $42,000

Part-2
Date	Account Tittle	Debit	Credit
30-Jun-20	Interest Expenses	$12,000.00
	Amortisation Expenses (12000/2)	$6,000.00
	Cash		$15,000.00
	Bond Discount		$6,000.00