20. B OC 18.00 points On January 1, 2009, Loop Raceway issued 375 bonds, each wi
ID: 2487806 • Letter: 2
Question
20. B OC 18.00 points On January 1, 2009, Loop Raceway issued 375 bonds, each with a face value of S1,000, a stated interest rate of 3.5% paid annually on December 31, and a maturity date of December 31, 2011 . On the issue date. the market interest rate was 5 percent, so the total proceeds from the bond issue were $359,667. Loop uses the straight-line bond amortization method. Required 1. Prepare a bond amortzation schedule. (Round your answers to the nearest whole dollar amount. Leave no cells blank be certain to enter "O" wherever required. Make sure that the unamortized premium or discount equals to '0' and the Carrying value equals to face value of the bond in the last period. Interest expense in the last period should be calculated as Cash Interest (+)discount)premium amortized.) Changes During the Period Ending Bond Liability Balances Period Discount AmortizedExpense Interest Ended Cashanges During the ExpeneeBonnding Bone L Paid Payable Bonds Payable Value 01/01/09 12/31/09 12/31/10 12/31/11 2. Give the journal entry to record the bond issue. (Round your answers to the nearest whole dollar amount. Omit the "S" sign in your response.) Date General Journal Debit Credit Jan. 1, 2009 (Click to select) (Click to select) (Click to select)Explanation / Answer
1. Bond amortization schedule:
2. To record bond issue:
3. To record interest payments:
4. To record interest and face value payment:
5. If the bonds were retired at $ 98 on January 1, 2011:
Period ended Cash paid Discount amortized Interest expense Bonds payable Discount on bonds payable Carrying value 01/01/2009 375,000 15,333 359,667 12/31/2009 13,125 5,111 18,236 375,000 10,222 364,778 12/31/2010 13,125 5,111 18,236 375,000 5,111 369,889 12/31/2011 13,125 5,111 18,236 375,000 - 375,000Related Questions
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