Question: Heathrow issues $200,000 of 6%, 15-year bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31st. The bonds are issued

Heathrow issues $200,000 of 6%, 15-year bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31st. The bonds are issued at a price of $1,728,224.

HEATHROW

Bonds issued, face value $2,000,000

Annual interest6%

Maturity in years 15

Issuance price 1,728,224

Issue price for Part 6 $2,447,990

Required:

1. Prepare the January 1, 2011, journal entry to record the bonds issuance.

2. For each semiannual period, compute

(a) the cash payment,

(b) the straight-line discount amortization,and

3. Determine the total bond interest expense to be recognized over the bonds life.

4. Prepare the first two years of an amortization table using the straight-line method.

5. Prepare the journal entries to record the first two interest payments.

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HEATHROW General Journal Part 1 Trans Date Account Titles no Debit Credit 2004 Jan 1 Cash 1728224 Discount on Bonds Payable 271776 Bonds Payable 20000... View full answer

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