Solution 1:
Journal Entries - Hillside | |||
Date | Particulars | Debit | Credit |
1-Jan-19 | Cash A/c Dr | $1,555,401.00 | |
Discount on bond payable | $244,599.00 | ||
To Bonds payable | $1,800,000.00 | ||
(To record issue of bond at discount) |
Solution 2a:
Computation of Semiannual cash interest payment | |||
Par (maturity Value) | Annual Rate | Semiannual period | Semiannual cash interest payment |
$1,800,000.00 | 7% | 2 | $63,000.00 |
Solution 2b:
Computation of Semiannual discount amortization | ||||
Bond Price | Par (maturity Value) | Discount on bond payable | Semiannual periods | Straight line Discount amortization |
$1,555,401.00 | $1,800,000.00 | $244,599.00 | 30 | $8,153 |
Solution 2c:
Computation of bond interest expense | ||
Semiannual cash payment | Discount amortization | Bond Interest Expense |
$63,000 | $8,153 | $71,153 |
Solution 3:
Total bond interest expense over the life of bond | |
Particulars | Amount |
Amount Repaid: | |
30 semiannual interest payments of $63,000 each | $1,890,000.00 |
Par Value at Maturity | $1,800,000.00 |
Total Repaid | $3,690,000.00 |
Less: Amount borrowed | $1,555,401.00 |
Total bond interest expense | $2,134,599.00 |
Solution 4:
First two years amortization table using straight line method | ||
Semiannual period end | Unamortized Discount | Carrying value of bond |
1-Jan-19 | $244,599.00 | $1,555,401.00 |
30-Jun-19 | $236,446.00 | $1,563,554.00 |
31-Dec-19 | $228,293.00 | $1,571,707.00 |
30-Jun-20 | $220,140.00 | $1,579,860.00 |
31-Dec-20 | $211,987.00 | $1,588,013.00 |
Solution 5:
Journal Entries - Hillside | |||
Date | Particulars | Debit | Credit |
30-Jun-19 | Interest Expense Dr | $71,153.00 | |
To Cash | $63,000.00 | ||
To Discount on bond payable | $8,153.00 | ||
(Being first semiannual interest payment made and discount amortized) | |||
31-Dec-19 | Interest Expense Dr | $71,153.00 | |
To Cash | $63,000.00 | ||
To Discount on bond payable | $8,153.00 | ||
(Being 2nd semiannual interest payment made and discount amortized) |
Hillside issues $1800,000 of 7% 15 -year bonds dated January 1, 2019. that pay interest semiannually on June 30...
3 Hillside issues $3,000,000 of 6%, 15-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31 The bonds are issued at a price of $3,671,990. Required: 1. Prepare the January 1 journal entry to record the bonds' issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line premium amortization. 2(c) For each semiannual period, complete the...
Hillside issues $2,900,000 of 9%, 15 year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31 The bonds are issued at a price of $3,549,590 Required: 1. Prepare the January 1 journal entry to record the bonds' issuance. 2a) For each semiannual period, complete the table below to calculate the cash payment 2/b) For each semiannual period, complete the table below to calculate the straight-line premium amortization 21c) For each semiannual period, complete the...
Hillside issues $1,800,000 of 7%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,555,401 Required: 1. Prepare the January 1, 2017, journal entry to record the bonds' issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization 2(c) For each semiannual period, complete the...
Hillside issues $2,100,000 of 5%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31 The bonds are issued at a price of $1,814,635. Required: 1. Prepare the January 1, 2017, journal entry to record the bonds' issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment 2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization 2(c) For each semiannual period, complete the...
Hillside issues $2,100,000 of 5%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31 The bonds are issued at a price of $1,814,635. Required: 1. Prepare the January 1, 2017, journal entry to record the bonds' issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization. 2(c) For each semiannual period, complete the...
Hillside issues $2,400,000 of 9%, 15-year bonds dated January 1, 2018, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $2,073,868. Required: 1. Prepare the January 1, 2018, journal entry to record the bonds’ issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization. 2(c) For each semiannual period, complete the...
Hillside issues $2,600,000 of 5%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,182,390 Required: 1. Prepare the January 1, 2017, journal entry to record the bonds' issuance. 2a) For each semiannual period, complete the table below to calculate the cash payment 2(b) For each semiannual period, complete the table below to calculate the straight-line premium amortization. 2c) For each semiannual period, complete the...
Hillside issues $1,900,000 of 5%, 15-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,641,812. Required: 1. Prepare the January 1 journal entry to record the bonds' issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization. 2(c) For each semiannual period, complete the table...
Hillside issues $2,100,000 of 5%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,814,635. Required: 1. Prepare the January 1, 2017, journal entry to record the bonds' issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization. 2(c) For each semiannual period, complete the...
Hillside issues $2,100,000 of 5%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,814,635. Required: 1. Prepare the January 1, 2017, journal entry to record the bonds' issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization 2(c) For each semiannual period, complete the...