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thomaslee
Oct 7, 2011, 07:55 AM
Heathrow issues \$2,300,000 of 8%, 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 \$2,815,190.

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)

Cash payment \$

2(b)

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. (Do not round your intermediate calculations. 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.)

Semiannual
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

thomaslee
Oct 7, 2011, 08:01 AM
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)

Cash payment \$

thomaslee
Oct 7, 2011, 08:06 AM
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 cash 2815190
Bond payable 2300000