Problem 14-2A Straight-line amortization of bond discount L.O. P1, P2 Required: 1. Prepare the January 1, 2011, journal entry to record the bonds issuance. (Omit the "$" sign in your response.)

Problem 14-2A Straight-line amortization of bond discount L.O. P1, P2

Required:

1. Prepare the January 1, 2011, journal entry to record the bonds’ issuance. (Omit the “$” sign in your response.)

Date General Journal Debit Credit

Jan. 1

2(a) For each semiannual period, compute the cash payment. (Do not round your intermediate calculations. Omit the “$” sign in your response.)

Cash payment $ __________

2(b) For each semiannual period, compute the the straight-line discount amortization. (Round your answer to the nearest dollar amount. Omit the “$” sign in your response.)

Amount of discount amortization $ __________

2(c) For each semiannual period, compute the bond interest expense. (Round your intermediate calculations and final answer to the nearest dollar amount. Omit the “$” sign in your response.)

Bond interest expense $ __________

3. Determine the total bond interest expense to be recognized over the bonds’ life. (Do not round semi-annual interest rate. Round intermediate calculations to the nearest dollar. Omit the “$” sign in your response.)

Total bond interest expense $ ___________

4. Prepare the first two years of an amortization table using the straight-line method. (Round your intermediate calculations and final answers to the nearest dollar amount. Omit the “$” sign in your response.)

Semiannual Period-End Unamortized Discount CarryingValue

1/01/2011 $__________ $__________

6/30/2011 __________ __________

12/31/2011 __________ __________

6/30/2012 __________ __________

12/31/2012 __________ __________

5. Prepare the journal entries to record the first two interest payments. (Round your intermediate calculations and final answers to the nearest dollar amount. Omit the “$” sign in your response.)

Date General Journal Debit Credit

June 30 _________

__________

__________

Dec. 31 __________

__________

__________

Problem 14-3A Straight-line amortization of bond premium L.O. P1, P3

Heathrow issues $2,800,000 of 8%, 15-year bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,427,190.

Required:

1. Prepare the January 1, 2011, journal entry to record the bonds’ issuance. (Omit the “$” sign in your response.)

Date General Journal Debit Credit

Jan. 1 ________

________

________

2(a) For each semiannual period, compute the cash payment. (Do not round your intermediate calculations. Omit the “$” sign in your response.)

Cash payment $ ______

2(b) For each semiannual period, compute the the straight-line premium amortization. (Round your final answer to the nearest dollar amount. Omit the “$” sign in your response.)

Amount of premium amortized $ _______

2(c) For each semiannual period, compute the the bond interest expense. (Round your intermediate calculations and final answer to the nearest dollar amount. Omit the “$” sign in your response.)

Bond interest expense $ ______

3. Determine the total bond interest expense to be recognized over the bonds’ life. (Do not round your intermediate calculations. Omit the “$” sign in your response.)

Total bond interest expense $ _________

4. Prepare the first two years of an amortization table using the straight-line method. (Round your intermediate calculations and final answers to the nearest dollar amount. Omit the “$” sign in your response.)

Semiannual

Period-End Unamortized Premium CarryingValue

1/01/2011 $ _________ $_________

6/30/2011 _________ __________

12/31/2011 _________ __________

6/30/2012 _________ __________

12/31/2012 _________ __________

5. Prepare the journal entries to record the first two interest payments. (Round your intermediate calculations and final answers to the nearest dollar amount. Omit the “$” sign in your response.)

Date General Journal Debit Credit

June 30 ____________

____________

__________

Dec. 31 ____________

____________

___________