100%v Collaborate Comment Text Shape Media Table Chart Insert Zoom View + P14-5A Courea: Inetrsntoes A M N G Hi E C C P14-5A Prepare entries to record issuance of bonds, payment of interest, and amortization of bond premium using effective interest method 4 On July 1, 2014, Flanagin Corporation issued $2,000,000, 1O%, 10-year bonds at $2.271.813. This price resulted in an effective-interest rate of 8% on the bonds. Flanagin uses the effective-interest method to amortize bond premum or discount. The bond pays semiannual interest July 1 and January 1. 6 10 Instructions (Round all computations to the nearest dollar.) 11 12 13 (a) Prepare the journal entry to record the issuance of the bonds on July 1, 2014. 14 b) Prepare an amortization table through December 31, 2015 (3 interest periods), for this bond issue. 15 (c) Prepare the journal entry to record the accrual of interest and the amortization of the premium on December 31 2014. 16 (d) Prepare the journal entry to record the payment of interest and the amortization of the premium on July 1, 2015, 17 assuming no accrual of interest on June 30. 18 e) Prepare the journal entry to record the accrual of interest and the amortization of the premium on December 31, 2015 19 20 NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?. 21 22 23 24 2014 26 (a) July 1 Account Value Account Account 26 Value 27 Value 28 29 30 (b) FLANAGIN CORPORATION Bond Premium Amortization 31 32 Effective-Interest Method Semiannual Interest Payments 33 10% Bonds IsSued at 8% (B) 34 (A) (C) Premium (D) Unamortized Premium (D)-(C) $271,813 $2,271,813.00 ? (E) Bond Carrying Value ($2,000,000 D) 35 (Market) Interest 36 Semi-annual Interest Periods Interest to Be Paid Amortization 37 Expense (A)- (B) 38 Issue date 39 $100,000 100,000 100,000 ? Starting pt-C 40 2 ? 41 42 43 ? 100,000 3 41 42 43 Value Account Account (c) Dec 31 44 Value 45 Value Account 46 47 48 2015 49 (d) July 1 Account 50 Value Account Value 51 52 Account Value 53 54 55 (e) Dec 31 56 Account Account Value Value 57 Account Value 58 59