Accounting Five problems Question

1. Heathrow issues $1,500,000 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 $1,296,168.

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 $1,300,000 of 7%, 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 $1,591,194.

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