Problem 3 Vonivette Company sold $10,000,000, 12%, 25 year bond son January 1, 2023. The bonds...

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Problem 3 Vonivette Company sold $10,000,000, 12%, 25 year bond son January 1, 2023. The bonds were dated January 1 and pay interest annually on January 1. Vonivette Company uses the straight- line method to amortize bond premium or discount. The bonds were sold at 95. Instructions: 1. Prepare the journal entry to record the issuance of the bonds on January 1, 2023 2. Prepare a bond discount amortization Schedule for the first 5 interest periods. (A) Annual Interest periods (B) Interest Expense to be C) (D) (E) Interest to be paid recorded. (A) + (C) Discount Amortization Unamortized Discount. (D) - (C) Bond Carrying Value - (D) 1 2 3 4 5 3. Prepare the journal entry for interest and the amortization of the discount in 2023 and www 2024 Date 1 1 2 Jan. 1 Cash 3 4 10 5 6 7 8 9 0 1 2 3 4 10 5 6 7 8 9 Vonivette Company Account Titles 2023 Discount on bonds Payable Bond Payable Debit Credit 1 $ 9,500,000.00 2 $ 500,000.00 3 $ 10,000,000.00 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 0 = 21 Annual Interest Be Paid Periods (A) Interest to (B) Interest Expense to be recorded (A)+(C) Vonivette Company Bond Discount Amortization Straight Line Method- Annual Interest Payments (D) Unamortized (C) Discount Amortization Discount (E) Bond Carrying Value (D) - (C) Issue date $ 2 1 $ 1,200,000.00 $ 1,220,000.00 $ 3. 2 $ 1,200,000.00 $ 1,220,000.00 $ 3 $ 1,200,000.00 $ 1,220,000.00 $ 5 4 $ 1,200,000.00 $ 1,220,000.00 $ 5 5 $ 1,200,000.00 $ 1,220,000.00 $ 20,000.00 $ 20,000.00 $ 20,000.00 $ 20,000.00 $ 20,000.00 $ 500,000.00 $ 9,500,000.00 ||1 480,000.00 $ 9,520,000.00 ||2 460,000.00 $ 9,540,000.00 3 440,000.00 $ 9,560,000.00 4 420,000.00 $ 9,580,000.00 ||5 400,000.00 $ 9,600,000.00 6 3. 8 Date Vonivette Company Journal Entry 2023 Dec. 31 Interest Expenses Discount on bonds Payable Interest Expenses Dec. 31 Interest Expenses 9 10 Debit Credit $ 1,220,000.00 $ $ 20,000.00 1,200,000.00 2024 $ 1,220,000.00 $ 20,000.00 $ 1,200,000.00 Discount on bonds Payable Interest Expenses Problem 3 Vonivette Company sold $10,000,000, 12%, 25 year bond son January 1, 2023. The bonds were dated January 1 and pay interest annually on January 1. Vonivette Company uses the straight- line method to amortize bond premium or discount. The bonds were sold at 95. Instructions: 1. Prepare the journal entry to record the issuance of the bonds on January 1, 2023 2. Prepare a bond discount amortization Schedule for the first 5 interest periods. (A) Annual Interest periods (B) Interest Expense to be C) (D) (E) Interest to be paid recorded. (A) + (C) Discount Amortization Unamortized Discount. (D) - (C) Bond Carrying Value - (D) 1 2 3 4 5 3. Prepare the journal entry for interest and the amortization of the discount in 2023 and www 2024 Date 1 1 2 Jan. 1 Cash 3 4 10 5 6 7 8 9 0 1 2 3 4 10 5 6 7 8 9 Vonivette Company Account Titles 2023 Discount on bonds Payable Bond Payable Debit Credit 1 $ 9,500,000.00 2 $ 500,000.00 3 $ 10,000,000.00 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 0 = 21 Annual Interest Be Paid Periods (A) Interest to (B) Interest Expense to be recorded (A)+(C) Vonivette Company Bond Discount Amortization Straight Line Method- Annual Interest Payments (D) Unamortized (C) Discount Amortization Discount (E) Bond Carrying Value (D) - (C) Issue date $ 2 1 $ 1,200,000.00 $ 1,220,000.00 $ 3. 2 $ 1,200,000.00 $ 1,220,000.00 $ 3 $ 1,200,000.00 $ 1,220,000.00 $ 5 4 $ 1,200,000.00 $ 1,220,000.00 $ 5 5 $ 1,200,000.00 $ 1,220,000.00 $ 20,000.00 $ 20,000.00 $ 20,000.00 $ 20,000.00 $ 20,000.00 $ 500,000.00 $ 9,500,000.00 ||1 480,000.00 $ 9,520,000.00 ||2 460,000.00 $ 9,540,000.00 3 440,000.00 $ 9,560,000.00 4 420,000.00 $ 9,580,000.00 ||5 400,000.00 $ 9,600,000.00 6 3. 8 Date Vonivette Company Journal Entry 2023 Dec. 31 Interest Expenses Discount on bonds Payable Interest Expenses Dec. 31 Interest Expenses 9 10 Debit Credit $ 1,220,000.00 $ $ 20,000.00 1,200,000.00 2024 $ 1,220,000.00 $ 20,000.00 $ 1,200,000.00 Discount on bonds Payable Interest Expenses