On June 30, 2020, Wildhorse Limited issued $3 million of 20-year, 14% bonds for $3,212,181, which provides a yield of 13%. The company uses the effective interest method to amortize any bond premium or discount. The bonds pay semi-annual interest on June 30 and December 31.

Prepare the journal entries to record the following transactions: (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.)

1.		The issuance of the bonds on June 30, 2020
2.		The payment of interest and the amortization of the premium on December 31, 2020
3.		The payment of interest and the amortization of the premium on June 30, 2021
4.		The payment of interest and the amortization of the premium on December 31, 2021

Date	Account Titles and Explanation	Debit	Credit
June 30, 2020	enter an account title for the journal entry on June 30	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on June 30	enter a debit amount	enter a credit amount
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
June 30, 2021	enter an account title for the journal entry on June 30	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on June 30	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on June 30	enter a debit amount	enter a credit amount
Dec. 31, 2021	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

List of Accounts

Show the proper presentation for the liability for bonds payable on the December 31, 2020 SFP. (Round answer to 0 decimal places, e.g. 5,275.)

Wildhorse Limited Statement of Financial Position (Partial) choose the accounting period For the Quarter Ended December 31, 2020For the Year Ended December 31, 2020December 31, 2020
Total AssetsIntangible AssetsTotal LiabilitiesTotal Non-current LiabilitiesTotal Current AssetsTotal Intangible AssetsTotal Liabilities and Partners' EquityLong-term debt InvestmentsProperty, Plant, and EquipmentTotal Partners' EquityTotal Current LiabilitiesTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Long-term InvestmentsCurrent LiabilitiesLong-term LiabilitiesPartners' EquityCurrent Assets
		$enter a dollar amount

List of Accounts

What amount of interest expense is reported for 2020?

Interest expense to be reported

$

List of Accounts

What is the total cost of borrowing over the life of the bond? (Round answer to 0 decimal places, e.g. 5,275.)

Total cost of borrowing over the life of the bond

$

Answer rating: 100% (QA)

Journal Entries in the book of Wildhorse Limited 1 Date 30 June 2020 2 Date 31 December 2... View the full answer