On January 1, 2020, Larkspur Inc. sold 14% bonds having a maturity value of $710,000 for $761,190, which provides the bondholders with a 12% yield. The bonds are dated January 1, 2020, and mature on January 1, 2025, with interest payable on January 1 of each year. The company follows IFRS and uses the effective interest method.

Prepare the journal entry at the date of issue. (Round answers to 0 decimal places, e.g. 5,255. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1, 2020	enter an account title for the journal entry on January 1	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on January 1	enter a debit amount	enter a credit amount

  

  

Prepare a schedule of interest expense and bond amortization for 2020 through 2023. (Round answers to 0 decimal places, e.g. 5,275.)

Schedule of Interest Expense and Bond Premium Amortization Effective Interest Method
Date		Credit Cash		Debit Interest Expense		Debit Bonds Payable		Carrying Amount of Bonds
1/1/20								$enter a dollar amount
1/1/21		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		enter a dollar amount
1/1/22		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
1/1/23		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount

  

  

Prepare the journal entries to record the interest payment and the amortization for 2020. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2020	enter an account title for the journal entry on December 31	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on December 31	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on December 31	enter a debit amount	enter a credit amount
Jan. 1, 2021	enter an account title for the journal entry on January 1	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on January 1	enter a debit amount	enter a credit amount

 

Answer rating: 100% (QA)

Journal Entry for The Issuance of Bond Date Account Title Explanation Debit Credit Jan 1 202... View the full answer