Problem One: On January 1, 2022, Saugatuck Company borrowed $250,000 for 5 years at 6% interest....

Transcribed Image Text:

Problem One: On January 1, 2022, Saugatuck Company borrowed $250,000 for 5 years at 6% interest. The loan requires 5 annual payments of $59,349.10 (round computations to the nearest PENNY). Complete the amortization schedule for this loan. 1. Date Cash Payment Interest Expense Reduction in Carry Value Carry Value 1/1/22 12/31/22 12/31/23 12/31/24 12/31/25 12/31/26 2. Provide the journal entry to record loan at inception. Date 1/1/22 A SE R E NI CF Account DR CR 3. Provide the journal entry to record payment at 12/31/2022. Date SE R E NI CF Account DR CR 12/31/22 Problem Two: On January 1, 2022, Swansea Corporation borrowed $15,000 for 5 years at 4% interest. The loan requires monthly payments of $276.25 (round computations to the nearest PENNY). 1. Complete the amortization schedule for this loan. Date 1/1/22 Cash Payment Interest Expense Reduction to Carry Value Carry Value 2/1/22 3/1/22 4/1/22 2. Provide the journal entry to record loan at inception. Date 1/1/22 3. Date 2/1/22 A L SE R E NI CF Account DR CR Provide the journal entry to record payment at 2/1/22. A SE R E NI CF Account DR CR Problem Three: On January 1, 2022, The Justice League issued $100,000, 9%, four-year bonds. Interest is paid semiannually on June 30 and December 31. The bonds were issued at $96,768 to yield an annual return of 10%. Required: 1) Show how Justice League calculated the $96,768 bond price (round each to the whole dollar). 2) Prepare an amortization schedule for the dates indicated using the effective interest rate method. Date 1/1/2022 Cash Payment 6/30/2022 12/31/2022 6/30/2023 Interest Expense Amortization Carry Value 3) Prepare the journal entries to record the issuance of the bond on January 1 and interest expense on June 30, 2022. Date 1/1/22 A L SE R E NI CF Account DR CR Date A L SE R E NI CF Account DR CR 6/30/22 3) What amount would the bonds be reported on the balance sheet at the end 2022? Problem One: On January 1, 2022, Saugatuck Company borrowed $250,000 for 5 years at 6% interest. The loan requires 5 annual payments of $59,349.10 (round computations to the nearest PENNY). Complete the amortization schedule for this loan. 1. Date Cash Payment Interest Expense Reduction in Carry Value Carry Value 1/1/22 12/31/22 12/31/23 12/31/24 12/31/25 12/31/26 2. Provide the journal entry to record loan at inception. Date 1/1/22 A SE R E NI CF Account DR CR 3. Provide the journal entry to record payment at 12/31/2022. Date SE R E NI CF Account DR CR 12/31/22 Problem Two: On January 1, 2022, Swansea Corporation borrowed $15,000 for 5 years at 4% interest. The loan requires monthly payments of $276.25 (round computations to the nearest PENNY). 1. Complete the amortization schedule for this loan. Date 1/1/22 Cash Payment Interest Expense Reduction to Carry Value Carry Value 2/1/22 3/1/22 4/1/22 2. Provide the journal entry to record loan at inception. Date 1/1/22 3. Date 2/1/22 A L SE R E NI CF Account DR CR Provide the journal entry to record payment at 2/1/22. A SE R E NI CF Account DR CR Problem Three: On January 1, 2022, The Justice League issued $100,000, 9%, four-year bonds. Interest is paid semiannually on June 30 and December 31. The bonds were issued at $96,768 to yield an annual return of 10%. Required: 1) Show how Justice League calculated the $96,768 bond price (round each to the whole dollar). 2) Prepare an amortization schedule for the dates indicated using the effective interest rate method. Date 1/1/2022 Cash Payment 6/30/2022 12/31/2022 6/30/2023 Interest Expense Amortization Carry Value 3) Prepare the journal entries to record the issuance of the bond on January 1 and interest expense on June 30, 2022. Date 1/1/22 A L SE R E NI CF Account DR CR Date A L SE R E NI CF Account DR CR 6/30/22 3) What amount would the bonds be reported on the balance sheet at the end 2022?