# Bonds Payable_Issue at premiun_Interest payment_Redemption

Question # 00005206 Posted By: ACCOUNTS_GURU Updated on: 12/12/2013 09:29 AM Due on: 01/31/2014
Subject Accounting Topic Accounting Tutorials:
Question

Following is an amortization table for an issue of three-year bonds on January 1, 2011:
EffectiveContractualCarrying
Carrying Value atInterestInterestAmortizationValue End
YearBeginning of YearIncurredto be Paidof PrincipalOf Year
2011\$105,154\$8,412\$10,000\$1,588\$103,566
2012\$103,566\$8,285\$10,000\$1,715\$101,851
2013\$101,851\$8,148\$10,000\$1,852\$100,000
Total\$24,845\$30,000\$5,155
Required:Place you answer in the shaded boxes below with any computations to the right
A. How much were the bonds sold for?
B. What is the stated (contractual) rate of interest?
C. What is the effective rate of interest?
D. Record the entries necessary over the life of the bonds for the issuance, retirement and yearly interest accrual.
You do not need to record the payment of interest.
DateAccount TitleDebitCredit
1/1/11CashThe accounts for the first entry have been entered
Premium on Bonds Payableenter the amounts and record the remaining entries.
Bonds PayableStart each entry opposite the date
12/31/11
12/31/12
12/31/13
12/31/13
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1. ## Solution: Bonds Payable_Issue at premiun_Interest payment_Redemption

Tutorial # 00004999 Posted By: ACCOUNTS_GURU Posted on: 12/12/2013 09:33 AM
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