Recording Bond Entries and Preparing an Amortization ScheduleEffective Interest Method, Discount, Interest Accrual

Mitchell Inc. issued 128, 6%, $1,000 bonds on January 1, 2020. The bonds pay cash interest semiannually each July 1, and January 1, and were issued to yield 7%. The bonds mature January 1, 2023, and the company uses the effective interest method to amortize bond discounts or premiums.

Required

a. Determine the selling price of the bonds. Round amount to the nearest dollar.

b. Prepare an amortization schedule for the full bond term.

c. Prepare journal entries on the following dates.

1. January 1, 2020, bond issuance.

2. July 1, 2020, interest payment.

3. December 31, 2020, interest accrual.

4. January 1, 2021, interest payment.

• Bond Selling Price
• Amortization Schedule
• Journal Entries

b.

• Note: Round amounts in schedule to the nearest whole dollar. Use rounded amounts for later calculations in the schedule.
• Note: Include any net rounding difference for Bond Payable, Net in the interest expense amount for January 1, 2023.

Date	Cash	Interest Expense	Discount Amortization	Bonds Payable, Net
Jan. 1, 2020				Answer
July 1, 2020	Answer	Answer	Answer	Answer
Jan. 1, 2021	Answer	Answer	Answer	Answer
July 1, 2021	Answer	Answer	Answer	Answer
Jan. 1, 2022	Answer	Answer	Answer	Answer
July 1, 2022	Answer	Answer	Answer	Answer
Jan. 1, 2023	Answer	Answer	Answer	Answer
Total	Answer	Answer	Answer