Heathrow issues $1,100,000 of 9%, 15-year bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $950,524.

Required:
1.
Prepare the January 1, 2011, journal entry to record the bonds’ issuance. (Omit the $ sign in your response.)

Date General Journal Debit Credit
Jan. 1

2(a)
For each semiannual period, compute the cash payment. (Omit the $ sign in your response.)

Cash payment $

2(b)
For each semiannual period, compute the the straight-line discount amortization. (Round your answer to the nearest dollar amount. Omit the $ sign in your response.)

Amount of discount amortization $

2(c)
For each semiannual period, compute the bond interest expense. (Round your intermediate calculations and final answer to the nearest dollar amount. Omit the $ sign in your response.)

Bond interest expense $

3.
Determine the total bond interest expense to be recognized over the bonds’ life. (Omit the $ sign in your response.)

Total bond interest expense $

4.
Prepare the first two years of an amortization table using the straight-line method. (Round your intermediate calculations and final answers to the nearest dollar amount. Omit the $ sign in your response. Omit the $ sign in your response.)

Semiannual Period-End Unamortized Discount Carrying
Value
1/01/2011 $ $
6/30/2011
12/31/2011
6/30/2012
12/31/2012

5.
Prepare the journal entries to record the first two interest payments. (Round your intermediate calculations and final answers to the nearest dollar amount. Omit the $ sign in your response.)

Date General Journal Debit Credit
June 30

Dec. 31

Heathrow issues $1,000,000 of 6%, 15-year bonds dated January 1, 2011, 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, 2011, journal entry to record the bonds’ issuance. (Omit the $ sign in your response.)

Date General Journal Debit Credit
Jan. 1

2(a)
For each semiannual period, compute the cash payment. (Omit the $ sign in your response.)

Cash payment $

2(b)
For each semiannual period, compute the the straight-line premium amortization. (Round your answer to the nearest dollar amount. Omit the $ sign in your response.)

Amount of premium amortized $

2(c)
For each semiannual period, compute the the bond interest expense. (Omit the $ sign in your response.)

Bond interest expense $

3.
Determine the total bond interest expense to be recognized over the bonds’ life. (Omit the $ sign in your response.)

Total bond interest expense $

4.
Prepare the first two years of an amortization table using the straight-line method. (Omit the $ sign in your response.)

Semiannual
Period-End Unamortized Premium Carrying
Value
1/01/2011 $ $
6/30/2011
12/31/2011
6/30/2012
12/31/2012

5.
Prepare the journal entries to record the first two interest payments. (Omit the $ sign in your response.)

Date General Journal Debit Credit
June 30

Dec. 31

Patton issues $670,000 of 6.0%, four-year bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31. They are issued at $624,896 and their market rate is 8% at the issue date.
references

10.value:
10.00 points

Problem 10-6A Part 1
1.
Prepare the January 1, 2011, journal entry to record the bonds’ issuance. (Omit the $ sign in your response.)

Date General Journal Debit Credit
Jan. 1

11.value:
10.00 points

Problem 10-6A Part 2
2.
Determine the total bond interest expense to be recognized over the bonds’ life. (Omit the $ sign in your response.)

Total bond interest expense $
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12.value:
10.00 points

Problem 10-6A Part 3
3.
Prepare a straight-line amortization table for the bonds’ first two years. (Make sure that the unamortized discount is adjusted to 0 and the carrying value equals to face value of the bond in the last period. Round your intermediate calculations and final answers to the nearest dollar amount. Omit the $ sign in your response.)

Semiannual
Interest Period-End Unamortized
Discount Carrying
Value
1/01/2011 $ $
6/30/2011
12/31/2011
6/30/2012
12/31/2012
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13.value:
10.00 points

Problem 10-6A Part 4
4.
Prepare the journal entries to record the first two interest payments. (Round your intermediate calculations and final answers to the nearest dollar amount. Omit the $ sign in your response.)

Date General Journal Debit Credit
June 30

Dec. 31