Bingo Ltd. is authorized to issue $6,000,000 of 5 percent, 10-year bonds. On January 2, 2020, when
Question:
Bingo Ltd. is authorized to issue $6,000,000 of 5 percent, 10-year bonds. On January 2, 2020, when the market interest rate is 6 percent, the company issues $4,800,000 of the bonds and receives cash of $4,442,941. Interest is paid on June 30 and December 31 each year.
Required
1. Prepare an amortization table for the first four semi-annual interest periods. Follow the format of Panel B in Exhibit 15–5 on page 833. Bingo Ltd. amortizes bond discounts by the effective-interest method.
2. Record the issue of the bonds on January 2, the first semi-annual interest payment on June 30, and the second payment on December 31.
3. Show the balance sheet presentation of the bond on the date of issue and on December 31, 2021.
Step by Step Answer:
Horngrens Accounting
ISBN: 9780135359785
11th Canadian Edition Volume 2
Authors: Tracie Miller Nobles, Brenda Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo Ann Johnston, Peter R. Norwood