Solution 1:
Journal Entries - Hillside | |||
Date | Particulars | Debit | Credit |
1-Jan-18 | Cash A/c Dr | $1,713,594.00 | |
To Bonds payable | $1,400,000.00 | ||
To Premium on issue of bond | $313,594.00 | ||
(To record issue of bond at premium) |
Solution 2a:
Computation of Semiannual cash interest payment | |||
Par (maturity Value) | Annual Rate | Semiannual period | Semiannual cash interest payment |
$1,400,000.00 | 5% | 2 | $35,000.00 |
Solution 2b:
Computation of Semiannual premium amortization | ||||
Bond Price | Par (maturity Value) | Premium on bond payable | Semiannual periods | Straight line premium amortization |
$1,713,594.00 | $1,400,000.00 | $313,594.00 | 30 | $10,453 |
Solution 2c:
Computation of bond interest expense | ||
Semiannual cash payment | Premium amortization | Bond Interest Expense |
$35,000.00 | $10,453 | $24,547 |
Solution 3:
Total bond interest expense over the life of bond | |
Particulars | Amount |
Amount Repaid: | |
30 semiannual interest payments of $35,000 each | $1,050,000.00 |
Par Value at Maturity | $1,400,000.00 |
Total Repaid | $2,450,000.00 |
Less: Amount borrowed | $1,713,594.00 |
Total bond interest expense | $736,406.00 |
Solution 4:
First two years amortization table using straight line method | ||
Semiannual period end | Unamortized premium | Carrying value of bond |
1-Jan-18 | $313,594.00 | $1,713,594.00 |
30-Jun-18 | $303,141.00 | $1,703,141.00 |
31-Dec-18 | $281,488.00 | $1,681,488.00 |
30-Jun-19 | $259,835.00 | $1,659,835.00 |
31-Dec-19 | $238,182.00 | $1,638,182.00 |
Solution 5:
Journal Entries - Hillside | |||
Date | Particulars | Debit | Credit |
30-Jun-18 | Interest Expense Dr | $24,547.00 | |
Premium on bond Dr | $10,453.00 | ||
To Cash | $35,000.00 | ||
(Being first semiannual interest payment made and premium amortized) | |||
31-Dec-18 | Interest Expense Dr | $24,547.00 | |
Premium on bond Dr | $10,453.00 | ||
To Cash | $35,000.00 | ||
(Being 2nd semiannual interest payment made and premium amortized) |
Saved Problem 10-3A Straight-Line: Amortization of bond premium LO P1, P3 Hillside issues $1...
Problem 10-3A Straight-Line: Amortization of bond premium LO P1, P3 Hillside issues $4,000,000 of 6%, 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 $4,895 980 ON Required: 1. Prepare the January 1, 2018, journal entry to record the bonds' Issuance 2 For each semiannual period, complete the table below to calculate the cash payment 21 For each semiannual period complete the table below to...
Saved Problem 10-2A Straight-Line: Amortization of bond discount LO P1, P2 Hillside issues $1,700,000 of 8%, 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 $1,468,990 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...
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Problem 10-1A Straight-Line: Amortization of bond discount LO P2 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 $2,505,923. 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 discount...
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hillside issues Problem 10-2A Straight-Line: Amortization of bond discount LO P1, P2 Hillside issues $4,000,000 of 6%, 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 $3,456,448. 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...
Hillside issues $1,500,000 of 6%, 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 $1,835,994. Required: 1. Prepare the January 1, 2017, journal entry to record the bonds' issuance. 21a) For each semiannual period, complete the table below to calculate the cash payment. 2b) For each semiannual period, complete the table below to calculate the straight-line premium amortization 21c) 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...
Problem 10-1A Straight-Line: Amortization of bond discount LO P2 Topic: Click here to ask chapturstplated queste Ch 10: Homework Ch 10: Homework Saved Help Save & Exit Submit Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion Return to question 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...
Hillside issues $1,000,000 of 6%, 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 $1,223,995. 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 premium amortization. 2(c) For each semiannual period, complete the...