On January 1, 2019, Gates Corporation issued $100,000 of 5-year bonds due December 31, 2023, for...

 

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On January 1, 2019, Gates Corporation issued $100,000 of 5-year bonds due December 31, 2023, for $103,604.79 minus debt issuance costs of $3,000. The bonds carry a stated rate of interest of 13% payable annually on December 31 and were issued to yield 12%. The company uses the effective interest method of amortization to amortize any discounts or premiums and the straight-line method to amortize the debt issuance costs. Required: F + Prepare the journal entries to record the issuance of the bonds, all the interest payments, premium amortizations, debt issuance cost amortizations, and the repayment of the bonds. In addition, prepare a bond interest expense and premium amortization schedule for the bonds. Journal 2019 has 10 lines Journal 2020 has 5 lines Journal 2021 has 5 lines Journal 2022 has 5 line Journal 2023 has 7 lines 4 + Prepare a bond interest expense and premium amortization schedule for the bonds. Amortization Schedule Instructions date 1/01/19 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 GATES CORPORATION Bond Interest Expense and Premium Amortization Schedule Effective Interest Method 13% Bonds Sold to Yield 12% Cash credit Interest expense debit Unamortized premium debit Book value of bonds On January 1, 2019, Gates Corporation issued $100,000 of 5-year bonds due December 31, 2023, for $103,604.79 minus debt issuance costs of $3,000. The bonds carry a stated rate of interest of 13% payable annually on December 31 and were issued to yield 12%. The company uses the effective interest method of amortization to amortize any discounts or premiums and the straight-line method to amortize the debt issuance costs. Required: F + Prepare the journal entries to record the issuance of the bonds, all the interest payments, premium amortizations, debt issuance cost amortizations, and the repayment of the bonds. In addition, prepare a bond interest expense and premium amortization schedule for the bonds. Journal 2019 has 10 lines Journal 2020 has 5 lines Journal 2021 has 5 lines Journal 2022 has 5 line Journal 2023 has 7 lines 4 + Prepare a bond interest expense and premium amortization schedule for the bonds. Amortization Schedule Instructions date 1/01/19 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 GATES CORPORATION Bond Interest Expense and Premium Amortization Schedule Effective Interest Method 13% Bonds Sold to Yield 12% Cash credit Interest expense debit Unamortized premium debit Book value of bonds

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