$6$

E$10-14($Algo$)($Chapter Supplement$)$ Recording and Reporting a Bond Issued at a Premium $($without Premium Account$)$ LO$10-5$

$5$

points

Park Corporation is planning to issue bonds with a face value of $$2,008,000$ and a coupon rate of $10$ percent. The bonds mature in $5$ years and pay interest semiannually every June $30$ and December $31.$ All of the bonds were sold on January $1$ of this year. Park uses the effective$-$interest amortization method and does not use a premium account. Assume an annual market rate of interest of $8\mathrm{.}5$ percent. $($FV of $$1,$ PV of $$1,$ FVA of $$1,$ and PVA of $$1)$

Note: Use appropriate factor$($s$)$ from the tables provided.

Required:

and $2.$ Prepare the journal entry to record the issuance of the bonds and the interest payment on June $30$ of this year.

What bonds payable amount will Park report on its June $30$ balance sheet?

Complete this question by entering your answers in the tabs below.

References

Required $1$

and $2$

Prepare the journal entry to record the issuance of the bonds and the interest payment on June $30$ of this year.

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Round your intermediate calculations and final answers to whole dollars.

Journal entry worksheet

$12$

Record the issuance of the bonds.

Note: Enter debits before credits.