On January 1, 2018, Irik Corporation issued $2,550,000 face value, 7%, 10-year bonds at $2,378,893. This...

 

Transcribed Image Text:

On January 1, 2018, Irik Corporation issued $2,550,000 face value, 7%, 10-year bonds at $2,378,893. This price resulted in an effective- interest rate of 8% on the bonds. The bonds pay annual interest, each January 1. Prepare the journal entry to record the issue of the bonds on January 1, 2018. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Jan, 1, 2018 Prepare an amortization table through December 31, 2021 (three interest periods) for this bond issue. Decemriods) for this bond issue. December 31 is the company's year-end. (Round answers to the nearest whole dollar, e.g. 5,275.) IRIK CORPORATION Bond Discount Amortization Effective-Interest Method - Annual Interest Payments Interest Annual Interest Discount Unamor- Bond Expense Interest to Be Amor- tized Carrying to Be Periods Paid tization Discount Amount Recorded Issue date-Jan. 1/18 %$4 1-Jan. 1/19 2- Jan. 1/20 3- Jan. 1/21 Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, 2018. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to the nearest whole dollar, eg. 5,275.) Date Account Titles and Explanation Debit Credit Dec. 31, 2018 Prepare the journal entry to record the payment of interest on January 1, 2019. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to the nearest whole dollar, eg. 5,275.) Date Account Titles and Explanation Debit Credit Jan. 1, 2019 Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, 2019. (Credit account titles are automaticaliy indented when the amount is entered. Do not indent manually. Round answers to the nearest whole dollar, eg. 5,275.) Date Account Titles and Explanation Debit Credit Dec. 31, 2019 On January 1, 2018, Irik Corporation issued $2,550,000 face value, 7%, 10-year bonds at $2,378,893. This price resulted in an effective- interest rate of 8% on the bonds. The bonds pay annual interest, each January 1. Prepare the journal entry to record the issue of the bonds on January 1, 2018. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Jan, 1, 2018 Prepare an amortization table through December 31, 2021 (three interest periods) for this bond issue. Decemriods) for this bond issue. December 31 is the company's year-end. (Round answers to the nearest whole dollar, e.g. 5,275.) IRIK CORPORATION Bond Discount Amortization Effective-Interest Method - Annual Interest Payments Interest Annual Interest Discount Unamor- Bond Expense Interest to Be Amor- tized Carrying to Be Periods Paid tization Discount Amount Recorded Issue date-Jan. 1/18 %$4 1-Jan. 1/19 2- Jan. 1/20 3- Jan. 1/21 Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, 2018. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to the nearest whole dollar, eg. 5,275.) Date Account Titles and Explanation Debit Credit Dec. 31, 2018 Prepare the journal entry to record the payment of interest on January 1, 2019. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to the nearest whole dollar, eg. 5,275.) Date Account Titles and Explanation Debit Credit Jan. 1, 2019 Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, 2019. (Credit account titles are automaticaliy indented when the amount is entered. Do not indent manually. Round answers to the nearest whole dollar, eg. 5,275.) Date Account Titles and Explanation Debit Credit Dec. 31, 2019

Answer rating: 100% (QA)

Solution 1 Journal Entries IRIK Corporation Date Particulars Debit Credit 1Jan18 Cash Dr 237889300 ... View the full answer