P10-8A Prepare journal entries to record issuance of bonds, interest, straight-line amortization, and balance shee
and balance sheet presentation Yung Corporation sold $2,000,000, 7%, 5 year bonds on January 1, 2014. The bonds were dated January 1, 2014,
on January 1. The company uses straight-line amortization on bond premiums or discounts. Instructions
(a)
Prepare all necessary journal entries to record the issuance of the bonds and bond interest expense for 2
assuming the bond sold at 102.
(b)
Prepare journal entries as in part (a) assuming the bonds sold at 97.
(c )
Show the balance sheet presentation for the bond issue at December 31, 2014, using (1) the 102 selling p
then (2) the 97 selling price
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . (a) Jan 1 Account Value
Account
Account Dec 31 Account
Account Value
Value Value
Value
Account (b) Jan 1 Account
Account Value Value
Value
Account Dec 31 Account Value Value
Account
Account (c ) Value
Value Premium
Current Liabilities
Interest Payable
Long-term Liabilities
Bonds payable, due 2019
Add: Premium on bonds payable Value Value
Value Value Discount
Current Liabilities
Interest Payable
Long-term Liabilities
Bonds payable, due 2019
Less: Discount on bonds payable Value Value
Value Value zation, and balance sheet presentation e dated January 1, 2014, and pay interest nd interest expense for 2014, sing (1) the 102 selling price, and n cells with a "?" . P10-8B Prepare journal entries to record issuance of bonds, interest, straight-line amortization, and balance sheet p
and balance sheet presentation
Holmes Corporation sold $2,200,000, 8%, 5-year bonds on January 1, 2014. The bonds were dated January 1, 2014,
on January 1. Holmes Corporation uses the straight-line method to amortize bond premiums or discounts. Instructions
(a)
Prepare all necessary journal entries to record the issuance of the bonds and bond interest expense for 201
assuming the bond sold at 102.
(b)
Prepare journal entries as in part (a) assuming g the bonds sold at 98.
(c )
Show the balance sheet presentation for the bond issue at December 31, 2014, using (1) the 102 selling pric
then (2) the 98 selling price
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . (a) Jan 1 Account Value
Account
Account Dec 31 Account
Account Value
Value Value
Value
Account (b) Jan 1 Account
Account Value Value
Value
Account Dec 31 Account Value Value
Account
Account (c ) Value
Value Premium
Current Liabilities
Interest Payable
Long-term Liabilities
Bonds payable, due 2019 Value Value Add: Premium on bonds payable Value Value Discount
Current Liabilities
Interest Payable
Long-term Liabilities
Bonds payable, due 2019
Less: Discount on bonds payable Value Value
Value Value ortization, and balance sheet presentation s were dated January 1, 2014, and pay interest
emiums or discounts. bond interest expense for 2014, 4, using (1) the 102 selling price, and a in cells with a "?" . P10-10A Prepare journal entries to record issuance of bonds, payment of interest, and amortization of bond disc
using effective interest method On January 1, 2014, Lock Corporation issued $1,800,000 face value, 5%, 10 year bonds at $1,667,518. This price
an effective interest rate of 6% on the bonds. Lock uses the effective-interest method to amortize bond premium
The bond pay annual interest January 1. Instructions
(Round all computations to the nearest dollar.)
(a)
Prepare the journal entry to record the issuance of the bonds on January 1, 2014.
(b)
Prepare an amortization table through December 31, 2016 (three interest periods) for this bond issue.
(c )
Prepare the journal entry to record the accrual of interest and the amortization of the discount on Decem
(d)
Prepare the journal entry to record the payment of interest on January 1, 2015.
(e )
Prepare the journal entry to record the accrual of interest and the amortization of the discount on Decem
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . (a) 2014
Jan 1 Account
Account
Account (b) (c ) LOCK CORP.
Bond Discount Amortization
Effective-Interest-Method - Annual Interest Payments
5% Bonds issued at 6%
(A)
(B)
(c )
(D)
Interest
Discount
Unamortized
Annual Interest Interest to Expense to Amortization
Discount
Periods
Be Paid
Be Recorded
(B) - (A)
(D) - (C )
Issue date
Value
1
$90,000
?
?
?
2
90,000
?
?
?
3
90,000
?
?
? 2015
Dec 31 Account
Account
Account (d) 2015
Jan 1 Account Account (e ) 2015
Dec 31 Account
Account
Account interest, and amortization of bond discount 0 year bonds at $1,667,518. This price resulted in
est method to amortize bond premium or discount. nuary 1, 2014.
nterest periods) for this bond issue.
amortization of the discount on December 31, 2014.
ary 1, 2015.
amortization of the discount on December 31, 2015.
or a formula in cells with a "?" . Value
Value
Value ayments
(E )
Bond
Carrying Value
$1,800,000 - D)
$1,667,518
?
?
? Value
Value
Value Value Value Value
Value
Value

 

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