Question: Bee Software Ltd. has successfully developed a new spreadsheet program. To produce and market the program, the company needs additional financing. On January 1, 2018,
Bee Software Ltd. has successfully developed a new spreadsheet program. To produce and market the program, the company needs additional financing. On January 1, 2018, Bee borrowed money as follows. A. Bee issued $1 million, 10%, 10-year bonds at face value. Interest is payable annually on January 1. B. Bee also issued a$400,000, 6%, 15-year mortgage payable. The terms provide for annual installment payments of$41,185 on December 31. Instructions A. For the 10-year, 10% bonds: (a) Journalize the issuance of the bonds on January 1, 2018. (b) Prepare the journal entries for interest expense in 2018. (c) Prepare the entry for the redemption of the bonds at $1,010,000 on January 1, 2021, after paying the interest due on this date. B. For the mortgage payable: (a) Prepare the entry for the issuance of the note on January 1, 2018. (b) Indicate the current and non-current amounts for the mortgage payable at December 31, 2018
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