Question

Am I doing this correctly? Can someone please post the answers?

This Question: 15 pts This Quiz: 70 pts possib 24 of 27 (27 complete) Unger Autoparts Inc. issued $190,000 of 2%, 10-year bonds at a price of 89 on January 31, 2017. The market interest rate at the date of issuance was 5%, and the standard bonds pay interest semi-annually. 1. Prepare an effective-interest amortization table for the bonds through the first three interest payments. 2. Record Unger's issuance of the bonds on January 31, 2017, and payment of the first semi-annual interest amount and amortization of the bonds on July 31, 2017. Explanations are not required 1. Prepare an effective-interest amortization table for the bonds through the first three interest payments. (Round your answ dollar.) ers to the nearest whole Unger Autoparts Amortization Table A D E Interest Payment Interest Expense Bond Discount Bond Discount Bond Semi-annual (1% of (2.5% of Preceding Bond Amortization Account Balance Carrying Amount Interest Date Maturity Value) Carrying Amount) (B-A) (Preceding D - C) ($190,000 D) 20900 169100 Jan 31, 2017 4228 171428 1900 2328 18572 July 31, 2017 4289 16183 1900 2389 173817 Jan 31, 2018 1900 July 31, 2018 2. Record Unger's issuance of the bonds on January 31, 2017, and payment of the first semi-annual interest amount and amortization of the bonds on July 31, 2017. (Record debits first, then credits. Explanations are not required.) Start by recording the issuance of bonds on January 31, 2017. Journal Entry 2017 Accounts Debit Credit Jan 31 Now, record the payment of the first semi-annual interest amount and amortization of the bonds on July 31, 2017 Choose from any list or enter any number in the input fields and then continue to the next question.

Answer 1

1. Effective-interest amortization table for the bonds through the first three interest payments:-
	Effective Interest method of Bond Amortization:-
	Unger Autoparts
	Amortization table
	Semi-annual interest Date	Interest Payment    (1% of Maturity Value)	Interest Expense to be recorded (2.5% of prreceding Bond carryig Amount)		Bond Discount Amortization (Payment - Interest Expense)	Bond discount Account Balance	End of period Bond Carrying value (Beginning balance+ amortization)
		A	B		C = B-A	D = Precedind D -C	E = $190000-D
	Jan 31, 2017					$                       20,900	$           169,100
	July 31, 2017	$            1,900	$                    4,228		$                                      2,328	$                       18,573	$           171,428
	Jan 31, 2018	$            1,900	$                    4,286		$                                      2,386	$                       16,187	$           173,813
	July 31, 2018	$            1,900	$                    4,345		$                                      2,445	$                       13,741	$           176,259
2. Journal entries:-
	Date	Account Titles and Explanation			Debit	Credit
	Jan 31, 2017	Cash ($190000*89/100)			$                                  169,100
		Discount on bonds payable			$                                    20,900
		Bonds Payable				$                     190,000
		(To record issue of bonds on discount)
	July 31, 2017	Interest Expense			$                                      4,228
		Interest Payable				$                         1,900
		Discount on bonds payable				$                         2,328
		(To record the accrual of interest and amortization of discount)

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