Cheyenne Co. is building a new hockey arena at a cost of $2,460,000. It received a downpayment of $500,000 from local businesses to support the project and now needs to borrow $1,960,000 to complete the project. It therefore decides to issue $1,960,000 of 10%, 10-year bonds. These bonds were issued on January 1, 2019, and pay interest annually on each January 1. The bonds yield 9%. Collapse question part (a) Correct answer. Your answer is correct. Prepare the journal entry to record the issuance of the bonds on January 1, 2019. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit January 1, 2019 Entry field with correct answer Cash Entry field with correct answer 2,085,786 Entry field with correct answer Entry field with correct answer Bonds Payable Entry field with correct answer Entry field with correct answer 1,960,000 Entry field with correct answer Premium on Bonds Payable Entry field with correct answer Entry field with correct answer 125,786 SHOW LIST OF ACCOUNTS SHOW SOLUTION LINK TO TEXT LINK TO TEXT Attempts: 1 of 5 used Collapse question part (b) Partially correct answer. Your answer is partially correct. Try again. Prepare a bond amortization schedule up to and including January 1, 2023, using the effective interest method. (Round answers to 0 decimal places, e.g. 38,548.) Date Cash Paid Interest Expense Premium Amortization Carrying Amount of Bonds 1/1/19 $Entry field with incorrect answer $Entry field with incorrect answer $Entry field with incorrect answer $Entry field with correct answer 2,085,787 1/1/20 Entry field with correct answer 196,000 Entry field with incorrect answer Entry field with incorrect answer Entry field with correct answer 2,077,508 1/1/21 Entry field with correct answer 196,000 Entry field with incorrect answer Entry field with incorrect answer Entry field with correct answer 2068,484 1/1/22 Entry field with correct answer 196,000 Entry field with incorrect answer Entry field with incorrect answer Entry field with correct answer 2,058,647 1/1/23 Entry field with correct answer 196,000 Entry field with incorrect answer Entry field with incorrect answer Entry field with correct answer 2,047,925
Cheyenne Co. is building a new hockey arena at a cost of $2,460,000. It received a downpayment of $500,000 from local businesses to support the project and now needs to borrow $1,960,000 to complete the project. It therefore decides to issue $1,960,000 of 10%, 10-year bonds. These bonds were issued on January 1, 2019, and pay interest annually on each January 1. The bonds yield 9%.
Collapse question part
(a)
Correct answer. Your answer is correct.
Prepare the
Date
Account Titles and Explanation
Debit
Credit
January 1, 2019
Entry field with correct answer
Cash
Entry field with correct answer
2,085,786
Entry field with correct answer
Entry field with correct answer
Bonds Payable
Entry field with correct answer
Entry field with correct answer
1,960,000
Entry field with correct answer
Premium on Bonds Payable
Entry field with correct answer
Entry field with correct answer
125,786
SHOW LIST OF ACCOUNTS
SHOW SOLUTION
LINK TO TEXT
LINK TO TEXT
Attempts: 1 of 5 used
Collapse question part
(b)
Partially correct answer. Your answer is partially correct. Try again.
Prepare a bond amortization schedule up to and including January 1, 2023, using the effective interest method. (Round answers to 0 decimal places, e.g. 38,548.)
Date
Cash
Paid
Interest
Expense
Premium
Amortization
Carrying
Amount of
Bonds
1/1/19 $Entry field with incorrect answer
$Entry field with incorrect answer
$Entry field with incorrect answer
$Entry field with correct answer
2,085,787
1/1/20 Entry field with correct answer
196,000
Entry field with incorrect answer
Entry field with incorrect answer
Entry field with correct answer
2,077,508
1/1/21 Entry field with correct answer
196,000
Entry field with incorrect answer
Entry field with incorrect answer
Entry field with correct answer
2068,484
1/1/22 Entry field with correct answer
196,000
Entry field with incorrect answer
Entry field with incorrect answer
Entry field with correct answer
2,058,647
1/1/23 Entry field with correct answer
196,000
Entry field with incorrect answer
Entry field with incorrect answer
Entry field with correct answer
2,047,925
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