Question: On January 1, 2013, Loop de Loop Raceway issued 700 bonds, each with a face value of $1,000, a stated interest rate of 6 percent

6 percent paid annually on December 31, and a maturity date of

December 31, 2015. On the issue date, the market interest rate was

7 percent, so the total proceeds from the bond issue were $681,631.

On January 1, 2013, Loop de Loop Raceway issued 700 bonds, each with a face value of $1,000, a stated interest rate of 6 percent paid annually on December 31, and a maturity date of December 31, 2015. On the issue date, the market interest rate was 7 percent, so the total proceeds from the bond issue were $681,631. Loop de Loop uses the straight-line bond amortization method. Required: 1. Prepare a bond amortization schedule. Changes During the Period Period Ended Ending Bond Liability Balances Bonds Discount on Bonds Carrying Value Payable Payable Discount Amortized Cash Paid Interest Expense 01/01/13 12/31/13 12/31/14 12/31/15 2. Prepare the journal entry to record the bond issue. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the issuance of bond. Note: Enter debits before credits Date General Journal Debit Credit Jan 01, 2013 Record entry Clear entry View general journal 3. Prepare the journal entries to record the interest payments on December 31, 2013 and 2014. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet

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