Simko Company issued $620,000, 10-year, 5 percent bonds on January 1, 2021. The bonds were issued...

 

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Simko Company issued $620,000, 10-year, 5 percent bonds on January 1, 2021. The bonds were issued for $590,000. Interest is payable annually on December 31. Using straight-line amortization, prepare journal entries to record (a) the bond issuance on January 1, 2021, and (b) the payment of interest on December 31, 2021. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) No Date 1 January 01, 2021 Cash General Journal Debit Credit 590,000 Bonds Payable 620,000 Discount on Bonds Payable 30,000 2 December 31, 202 Interest Expense 34,000 Discount on Bonds Payable Cash 3,000 31,000 5 1.5 points On January 1, 2021, Loop Raceway issued 530 bonds, each with a face value of $1,000, a stated interest rate of 7 percent paid annually on December 31, and a maturity date of December 31, 2023. On the issue date, the market interest rate was 8 percent, so the total proceeds from the bond issue were $516,324. Loop uses the straight-line 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 entries to record the bond issue, the interest payments on December 31, 2021 and 2022, the 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 99. Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 5 Prepare a bond amortization schedule. Changes During the Period Ending Bond Liability Balances Period Ended Cash Paid Discount Amortized Interest Expense Bonds Payable Discount on Bonds Payable Carrying Value 01/01/21 12/31/21 $ 37,100 $ 4,559 $ 41,659 $530,000 530,000 $ 13,6766 $ 516,324 9,117 520,883 12/31/22 37,100 4,559 41,659 530,000 4,558 525,442 12/31/23 37,100 4,558 41,658 530,000 0 530,000 Req 1 Req 2 to 5 > 5 Req 1 Req 2 to 5 1.5 points Prepare the journal entries to record the bond issue, the interest payments on December 31, 2021 and 2022, the 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 99. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) No 1 Date January 01, 2021 Cash Discount on Bonds Payable Bonds Payable 2 December 31, 2021 Interest Expense Discount on Bonds Payable Cash General Journal Show less Debit 516,324 Credit 13,676 530,000 41,656 4,556 x 37,100 3 December 31, 2022 Interest Expense Discount on Bonds Payable Cash 41,659 4,556 37,100 4 December 31, 2023 Interest Expense 41,658 Bonds Payable 530,000 Discount on Bonds Payable Cash 4,558 530,000 x 5 January 01, 2023 Bonds Payable Discount on Bonds Payable Cash Gain on Bond Retirement 530,000 4,558 524,700 742 < Req 1 Req 2 to 5 > 5 Req 1 Req 2 to 5 Prepare the journal entries to record the bond issue, the interest payments on December 31, 2021 and 2022, the 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 99. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) 1.5 points No 1 Date January 01, 2021 Cash Discount on Bonds Payable Bonds Payable 2 December 31, 2021 Interest Expense Discount on Bonds Payable Cash 3 December 31, 2022 Interest Expense Discount on Bonds Payable Cash 4 December 31, 2023 Interest Expense Bonds Payable Discount on Bonds Payable Cash 5 January 01, 2023 Bonds Payable Discount on Bonds Payable Cash Gain on Bond Retirement General Journal < Req 1 Req 2 to 5 > 0000 0000 Show less Debit 516,324 Credit 13,676 530,000 41,659 4,559 37,100 41,659 4,559 37,100 41,658 530,000 4,558 530,000 4,558 524,700 742 Simko Company issued $620,000, 10-year, 5 percent bonds on January 1, 2021. The bonds were issued for $590,000. Interest is payable annually on December 31. Using straight-line amortization, prepare journal entries to record (a) the bond issuance on January 1, 2021, and (b) the payment of interest on December 31, 2021. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) No Date 1 January 01, 2021 Cash General Journal Debit Credit 590,000 Bonds Payable 620,000 Discount on Bonds Payable 30,000 2 December 31, 202 Interest Expense 34,000 Discount on Bonds Payable Cash 3,000 31,000 5 1.5 points On January 1, 2021, Loop Raceway issued 530 bonds, each with a face value of $1,000, a stated interest rate of 7 percent paid annually on December 31, and a maturity date of December 31, 2023. On the issue date, the market interest rate was 8 percent, so the total proceeds from the bond issue were $516,324. Loop uses the straight-line 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 entries to record the bond issue, the interest payments on December 31, 2021 and 2022, the 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 99. Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 5 Prepare a bond amortization schedule. Changes During the Period Ending Bond Liability Balances Period Ended Cash Paid Discount Amortized Interest Expense Bonds Payable Discount on Bonds Payable Carrying Value 01/01/21 12/31/21 $ 37,100 $ 4,559 $ 41,659 $530,000 530,000 $ 13,6766 $ 516,324 9,117 520,883 12/31/22 37,100 4,559 41,659 530,000 4,558 525,442 12/31/23 37,100 4,558 41,658 530,000 0 530,000 Req 1 Req 2 to 5 > 5 Req 1 Req 2 to 5 1.5 points Prepare the journal entries to record the bond issue, the interest payments on December 31, 2021 and 2022, the 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 99. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) No 1 Date January 01, 2021 Cash Discount on Bonds Payable Bonds Payable 2 December 31, 2021 Interest Expense Discount on Bonds Payable Cash General Journal Show less Debit 516,324 Credit 13,676 530,000 41,656 4,556 x 37,100 3 December 31, 2022 Interest Expense Discount on Bonds Payable Cash 41,659 4,556 37,100 4 December 31, 2023 Interest Expense 41,658 Bonds Payable 530,000 Discount on Bonds Payable Cash 4,558 530,000 x 5 January 01, 2023 Bonds Payable Discount on Bonds Payable Cash Gain on Bond Retirement 530,000 4,558 524,700 742 < Req 1 Req 2 to 5 > 5 Req 1 Req 2 to 5 Prepare the journal entries to record the bond issue, the interest payments on December 31, 2021 and 2022, the 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 99. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) 1.5 points No 1 Date January 01, 2021 Cash Discount on Bonds Payable Bonds Payable 2 December 31, 2021 Interest Expense Discount on Bonds Payable Cash 3 December 31, 2022 Interest Expense Discount on Bonds Payable Cash 4 December 31, 2023 Interest Expense Bonds Payable Discount on Bonds Payable Cash 5 January 01, 2023 Bonds Payable Discount on Bonds Payable Cash Gain on Bond Retirement General Journal < Req 1 Req 2 to 5 > 0000 0000 Show less Debit 516,324 Credit 13,676 530,000 41,659 4,559 37,100 41,659 4,559 37,100 41,658 530,000 4,558 530,000 4,558 524,700 742