Mahalo Boat Adventure Inc. has a July 31 year-end. It showed the following partial amortization schedules regarding

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Mahalo Boat Adventure Inc. has a July 31 year-end. It showed the following partial amortization schedules regarding two bond issues:

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Required

Answer the following for each bond issue:

a. Were the bonds issued at a premium and/or discount?

b. Journalize the issuance of bond issue A and B on June 1, 2020, and April 1, 2018, respectively.

c. What is the contract interest rate for each bond issue?

d. Interest of how much is paid how often for each bond issue?

e. What is the term of each bond issue?

f. Show how each of the bonds would appear on the balance sheet under non-current liabilities at July 31, 2026.

g. Calculate the total bond interest expense that would appear on the income statement for the year ended July 31, 2027.

h. Independent of (a) through (g), assume both bond issues were retired on December 1, 2027, at 97. Record the entries.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Related Book For  book-img-for-question

Fundamental Accounting Principles Volume II

ISBN: 978-1260305838

16th Canadian edition

Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann

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