On January 1, 2024, North West Suppliers Ltd. issued $500,000, 6%, five-year bonds, with interest payable...

 

Transcribed Image Text:

On January 1, 2024, North West Suppliers Ltd. issued $500,000, 6%, five-year bonds, with interest payable on July 1 and January 1. Since the market interest rate was 5%, the bonds sold for $521,XXX. The company's year end is November 30. Instructions For the issue date and first semi-annual period, complete (A) through (E) in the table below for the first three periods and show your calculations. (A) Interest (B) Interest Expense (C) Premium Period to be Paid to be Recorded Amortization (D) Unamortized Premium (E) Bond Carrying amount Prepare journal entries for: a. Issuance of the bond. b. Interest payment on July 1, 2024. c. Year-end adjusting entry. d. Interest payment on January 1, 2025. On January 1, 2024, North West Suppliers Ltd. issued $500,000, 6%, five-year bonds, with interest payable on July 1 and January 1. Since the market interest rate was 5%, the bonds sold for $521,XXX. The company's year end is November 30. Instructions For the issue date and first semi-annual period, complete (A) through (E) in the table below for the first three periods and show your calculations. (A) Interest (B) Interest Expense (C) Premium Period to be Paid to be Recorded Amortization (D) Unamortized Premium (E) Bond Carrying amount Prepare journal entries for: a. Issuance of the bond. b. Interest payment on July 1, 2024. c. Year-end adjusting entry. d. Interest payment on January 1, 2025.