Question

Problem 14-10AB Effective Interest: Amortization of bond LO P6

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Ike issues $270,000 of 11%, three-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $276,848. When the market rate is 10%.

Journal entry worksheet Record the issue of bonds with a par value of $270,000 on January 1, 2019 at an issue price of $276,848. Note: Enter debits before credits. Date General Journal Debit Credit January 01

Ike issues $270,000 of 11%, three-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $276,848. When the market rate is 10%.

Ike issues $270,000 of 11%, three-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $276,848. When the market rate is 10%.

Ike issues $270,000 of 11%, three-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $276,848. When the market rate is 10%.

Answer in these formats please!

Answer 1

Required Date General Journal Debit Credit January $276848 cash Dr 2019 TO Bonds payable $ 270000 To premium on Bonds $ 6848 payable

Required Amount repaid: $89100 nts of $14850 [270000X11").x 6] parvalue at maturity Total repaid $ 270000 $ 359100 (-) Amount bornwed ($276848) Total bond interest Expene $ 82252

Required Semiannual Interest period End cash interest paid Bond inerent Expene Carrying premium Amortization unamized premium value del 2019 $ 276848 $6848 (276848 - 240000) 6/30/2019 $13842 $ 144850 (270000x1)x4) $ 1008 (14850-13842) $5840 (6848-1008) $275840 (276848-1008) (276848x10').X6) 12/31/2019 $4782 $ 14850 $1058 $13792 (2758408101.862) $274782 (275840-1058) (14850-13792) (8840-1058) $ 1111 $367 $13739 6/30/2020 $14850 $27367 (274782-0111) (274982x107x) (14850-13739) (4782-111) $2505 $272505 12/31/2020 $14,850 $ 13684 (27367410-7X6) $1166 (14850-13684) (3674-1166)

Required Date Genral Journal Debit June 30 Interest Expense DY $13842 premium on Bonds DY $1008 TO Cash $14850 (Being to record first interest payment) December Interest Expense Dr $13792 31 premium on Bonds Dr $1058 TO Cash $14850 (Being to record second interest payment)