1 answer

Required information [The following information applies to the questions displayed below.] On January 1, 2021, White...

Question:

Required information [The following information applies to the questions displayed below.] On January 1, 2021, White Water isRequired information (The following information applies to the questions displayed below.) On January 1, 2021, White Water isView transaction list Journal entry worksheet < 1 2 Record the first annual interest payment. Note: Enter debits before crediView transaction list Journal entry worksheet < 1 2 3 Record the second annual interest payment. Note: Enter debits before cr

Required information [The following information applies to the questions displayed below.] On January 1, 2021, White Water issues $530,000 of 6% bonds, due in 20 years, with interest payable annually on December 31 each year. Assuming the market interest rate on the issue date is 7%, the bonds will issue at $473,852. Required: 1. Complete the first three rows of an amortization schedule. (Round your final answers to the nearest whole dollar.) Date Cash Paid Interest Expense Increase in Carrying Value Carrying Value 01/01/2021 12/31/2021 12/31/2022
Required information (The following information applies to the questions displayed below.) On January 1, 2021, White Water issues $530,000 of 6% bonds, due in 20 years, with interest payable annually on December 31 each year. Assuming the market interest rate on the issue date is 7%, the bonds will issue at $473,852. 2. Record the bond issue on January 1, 2021, and the first two interest payments on December 31, 2021, and December 31, 2022. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your final answers to the nearest whole dollar.) View transaction list Journal entry worksheet < 1 2 3 Record the bond issue. Note: Enter debits before credits. General Journal Debit Credit Date January 01, 2021 Record entry Clear entry View general journal
View transaction list Journal entry worksheet < 1 2 Record the first annual interest payment. Note: Enter debits before credits. General Journal Debit Credit Date December 31, 2021 Record entry Clear entry View general journal
View transaction list Journal entry worksheet < 1 2 3 Record the second annual interest payment. Note: Enter debits before credits. Date General Journal Debit Credit December 31, 2022 Record entry Clear entry View general journal

Answers

Requirement 1:

Date Cash Paid Interest
Expense
Increase in
Carrying Value
Carrying
Value
1/1/2021 $473,852
12/31/2021 $31,800 $33,170 $1,370 $475,222
12/31/2022 $31,800 $33,266 $1,466 $476,687

Cash paid = $530,000 face value x 6% = $31,800

Interest expense = Preceding carrying value x 7% market rate

Increase in carrying value = Interest expense - Cash paid

Carrying value = Preceding carrying value + Increase in carrying value

Requirement 2:

Date Account title and explanation Debit Credit
January 01,2012 Cash $473,852
Discount on bonds payable $56,148
Bonds payable $530,000
[To record issuance of bonds]
December 31,2021 Interest expense $33,170
Discount on bonds payable $1,370
Cash $31,800
[To record the first annual interest payment]
December 31,2021 Interest expense $33,266
Discount on bonds payable $1,466
Cash $31,800
[To record the first annual interest payment]
.

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