PB$10-7($Algo$)($Supplement $10$B$)$ Recording Bond Issue, Interest Payments $($Effective$-$Interest Amortization$),$ and Early Bond Retirement $[$LO $10-$S$2]$

On January $1,2021,$ Methodical Manufacturing issued $100$ bonds, each with a face value of $$1,000,$ a stated interest rate of $5$ percent paid annually on December $31,$ and a maturity date of December $31,2023.$ On the issue date, the market interest rate was $4\mathrm{.}25$ percent, so the total proceeds from the bond issue were $$102,070.$ Methodical uses the effective$-$interest bond amortization method and adjusts for any rounding errors when recording interest in the final year.

Required:

$1.$ Prepare a bond amortization schedule.

$2-5.$ Prepare the journal entry to record the bond issue, interest payments on December $31,2021$ and $2022,$ interest and face value payment on December $31,2023$ and the bond retirement. Assume the bonds are retired on January $1,2023,$ at a price of $102\mathrm{.}1$ PB$10-7($Algo$)($Supplement $10$B$)$ Recording Bond Issue, Interest Payments $($Effective$-$Interest

Amortization$),$ and Early Bond Retirement $[$LO $10-$S$2]$

On January $1,2021,$ Methodical Manufacturing issued $100$ bonds, each with a face value of $$1,000,$ a stated interest rate of $5$ percent

paid annually on December $31,$ and a maturity date of December $31,2023.$ On the issue date, the market interest rate was $4\mathrm{.}25$

percent, so the total proceeds from the bond issue were $$102,070.$ Methodical uses the effective$-$interest bond amortization method

and adjusts for any rounding errors when recording interest in the final year.

Required:

Prepare a bond amortization schedule.

$2-5.$ Prepare the journal entry to record the bond issue, interest payments on December $31,2021$ and $2022,$ interest and face value

payment on December $31,2023$ and the bond retirement. Assume the bonds are retired on January $1,2023,$ at a prife of $102.$

Complete this question by entering your answers in the tabs below.

Prepare a bond amortization schedule. $($Round your answers to the nearest whole dollar. Make sure that the Carrying value equals face

value of the bond in the last period. Interest expense in the last period will result in the amount in Premium Amortized equaling

Premium on Bonds Payable.$)$