AC312 - Bonds – Excel Project
AC312 - Bonds – Excel Project
Instructions: You must complete your work in Excel using formulas. Please submit your Excel file as an attachment to the link provided in the classroom.
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Bond interest and discount amortization. BU Curriculum Corporation issued $900,000 of 8% bonds on November 1, 2015, due on November 1, 2020. The interest is to be paid twice a year on May 1 and November 1. The bonds were sold to yield 10% effective annual interest. BU Curriculum Corporation closes its books annually on December 31. Instructions (a) Complete an amortization schedule for the above bond (for all periods) in a similar format as below. (Round all answers to the nearest dollar.) Use the effective-interest method.
(b) Prepare the journal entries for the following: 1. November 1, 2015 bond issue 2. Adjusting entry for December 31, 2015 (adjusting entry should cover 2 months) 3. May 1, 2016 entry 4. November 1, 2016 entry 5. Adjusting entry from December 31, 2016 (c) Compute the interest expense to be reported in the income statement for the year ended December 31, 2015 and December 31, 2016. (d) Complete an amortization schedule for the above bond (for all periods) using the straight-line amortization method (entries are not required). |
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Solution: AC312 - Bonds – Excel Project