The following partial amortization table was developed for a 6.0%, $700,000 5-year bond that pays interest each 30 September and 31 March. The table uses an effective interest rate of 5%. The bond was issued on 1 August 20X1.

	Amortization Schedule, Effective-Interest Method:
Interest Period	Cash Interest		Interest Expense		Premium Amortization		Balance Unamortized Premium		Carrying Amount of Bonds
Opening							$	30,632	$	730,632
1 (30 Sept. 20X1)	$	21,000	$	18,266	$	2,734		27,898		727,898
2		21,000		18,197		2,803		25,095		725,095
3		21,000		18,127		2,873		22,222		722,222
4		21,000		18,056		2,944		19,278		719,278
5		21,000		17,982		3,018		16,260		716,260
6		21,000		17,907		3,093		13,167		713,167
7		21,000		17,829		3,171		9,996		709,996

Required:
1-a. Calculate the issuance proceeds of the bond. (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.)

1-b. Calculate the issuance proceeds of the accrued interest.

2. Record all entries associated with the bond for 20X1 and 20X2. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)

3. Calculate interest expense for 20X1 and determine the net balance of bonds payable as of 31 December 20X1. (Round your answer to the nearest whole dollar amount.)

Answer rating: 100% (QA)

1a Calculate the issuance proceeds of the bond Where PV Present Value issuance proceeds PMT Annual interest payment 6 of 700000 42000 r Effective inte... View the full answer