Question

Help with 1-5 Please

Refer to the bond details in Problem 14-1A, except assume that the bonds are issued at a price of $4,895,980. Problem 14-2A Straight Line: Amortization of bond premium P3 Required 1. Prepare the January 1 journal entry to record the bonds’ issuance. 2. For each semiannual period, compute (a) the cash payment, (b) the straight-line premium amortiza- tion, and (c) the bond interest expense. 3. Determine the total bond interest expense to be recognized over the bonds' life. 4. Prepare the first two years of a straight-line amortization table like Exhibit 14.11. 5. Prepare the journal entries to record the first two interest payments. Check (3) $2,704,020 (4) 12/31/2020 carrying value, $4.776.516

Answer 1

Journal entry
Date	General Journal				Debit	Credit
1/1/2019	Cash				4,895,980
	premium on bonds					895,980
	bonds payable					4,000,000
2-a)	par maturity value			Annual rate	/	year	semi annual cash payment
	4,000,000		*	6%		6./12	120000
							semi annual		Straight line
2-b)	bond price		par value		premium		periods		premium amortization
	4,895,980	-	4,000,000	=	895,980	/	30	=	29866
2-c)	Semi annual cash			premium		bond interest expense
	payment			amortization
	120,000		-	29866	=	90,134
3)	total bond interest expense over life of bonds
	amount repaid
	30	payments of		120,000	3600000
		par value ant maturity			4,000,000
	total repaid				7600000
	less amount borrowed				4,895,980
	total bond interest expense.				2,704,020
4)		unamort	Carrying
	period	premium	value
	1/1/2019	895,980	4,895,980
	06/30/19	866,114	4,866,114
	12/31/19	836,248	4,836,248
	06/30/20	806,382	4,806,382
	12/31/20	776,516	4,776,516
5)
Date	General Journal				Debit	Credit
6/30/19	interest expense				90,134
	premium on bonds payable				29,866
	cash					120,000
31/12/2019
	interest expense				90,134
	premium on bonds payable					29,866
	cash					120,000