Instructions On January 1, Year 1, Calvert Company issues 10%, $100,000 face value bonds for $103,629.90,...

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Instructions On January 1, Year 1, Calvert Company issues 10%, $100,000 face value bonds for $103,629.90, a price to yield 8%. The bonds mature on December 31, Year 2. Interest is paid semiannually on June 30 and December 31. Required: 1. Prepare a bond interest expense and premium amortization schedule using the straight-line method. 2. Prepare a bond interest expense and premium amortization schedule using the effective interest method. 3. Prepare the journal entries to record the interest payments on June 30, Year 1, and December 31, Year 1, using both methods. X Chart of Accounts CHART OF ACCOUNTS Calvert Company General Ledger ASSETS 111 Cash 121 Accounts Receivable 141 Inventory 152 Prepaid Insurance 181 Equipment 198 Accumulated Depreciation LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 255 Bonds Payable 256 Premium on Bonds Payable 261 Income Taxes Payable REVENUE 411 Sales Revenue EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense 521 Salaries Expense 532 Bad Debt Expense 540 Interest Expense 541 Depreciation Expense 559 Miscellaneous Expenses 910 Income Tax Expense EQUITY 311 Common Stock 331 Retained Earnings Analysis 1. Prepare a bond interest expense and premium amortization schedule using the straight-line method. Analysis Instructions CALVERT COMPANY Bond Interest Expense and Premium Amortization Schedule Straight-Line Method 1 Date Cash Credit Interest Expense Debit Unamortized Premium Debit Book Value of Bonds 2 01/01/Year 1 3 06/30/Year 1 4 12/31/Year 1 5 06/30/Year 2 6 12/31/Year 2 2. Prepare a bond interest expense and premium amortization schedule using the effective interest method. Analysis Instructions CALVERT COMPANY Bond Interest Expense and Premium Amortization Schedule Effective Interest Method 1 Date Cash Credit 2 01/01/Year 1 3 06/30/Year 1 4 12/31/Year 1 5 06/30/Year 2 6 12/31/Year 2 Interest Expense Unamortized Book Value of Debit Premium Debit Bonds General Journal 3a. Prepare the journal entries to record the interest payments on June 30, Year 1, and December 31, Year 1, using the straight-line method. General Journal Instructions GENERAL JOURNAL DATE ACCOUNT TITLE 1 2 3 4 5 6 PAGE 1 POST. REF. DEBIT CREDIT 3b. Prepare the journal entries to record the interest payments on June 30, Year 1, and December 31, Year 1, using the effective interest method. General Journal Instructions PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4 5 6 Instructions On January 1, Year 1, Calvert Company issues 10%, $100,000 face value bonds for $103,629.90, a price to yield 8%. The bonds mature on December 31, Year 2. Interest is paid semiannually on June 30 and December 31. Required: 1. Prepare a bond interest expense and premium amortization schedule using the straight-line method. 2. Prepare a bond interest expense and premium amortization schedule using the effective interest method. 3. Prepare the journal entries to record the interest payments on June 30, Year 1, and December 31, Year 1, using both methods. X Chart of Accounts CHART OF ACCOUNTS Calvert Company General Ledger ASSETS 111 Cash 121 Accounts Receivable 141 Inventory 152 Prepaid Insurance 181 Equipment 198 Accumulated Depreciation LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 255 Bonds Payable 256 Premium on Bonds Payable 261 Income Taxes Payable REVENUE 411 Sales Revenue EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense 521 Salaries Expense 532 Bad Debt Expense 540 Interest Expense 541 Depreciation Expense 559 Miscellaneous Expenses 910 Income Tax Expense EQUITY 311 Common Stock 331 Retained Earnings Analysis 1. Prepare a bond interest expense and premium amortization schedule using the straight-line method. Analysis Instructions CALVERT COMPANY Bond Interest Expense and Premium Amortization Schedule Straight-Line Method 1 Date Cash Credit Interest Expense Debit Unamortized Premium Debit Book Value of Bonds 2 01/01/Year 1 3 06/30/Year 1 4 12/31/Year 1 5 06/30/Year 2 6 12/31/Year 2 2. Prepare a bond interest expense and premium amortization schedule using the effective interest method. Analysis Instructions CALVERT COMPANY Bond Interest Expense and Premium Amortization Schedule Effective Interest Method 1 Date Cash Credit 2 01/01/Year 1 3 06/30/Year 1 4 12/31/Year 1 5 06/30/Year 2 6 12/31/Year 2 Interest Expense Unamortized Book Value of Debit Premium Debit Bonds General Journal 3a. Prepare the journal entries to record the interest payments on June 30, Year 1, and December 31, Year 1, using the straight-line method. General Journal Instructions GENERAL JOURNAL DATE ACCOUNT TITLE 1 2 3 4 5 6 PAGE 1 POST. REF. DEBIT CREDIT 3b. Prepare the journal entries to record the interest payments on June 30, Year 1, and December 31, Year 1, using the effective interest method. General Journal Instructions PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4 5 6