Ellis issues $250,000, 6.5%, 5-year bonds dated January 1, 2023. The bonds pay interest semi-annually on June 30 and December 31. The bonds were issued at $255,330. Record the journal entry to issue the bonds on January 1, 2023. a. Record the journal entry to pay the semi-annual interest payment and amortize the premium on June 30, 2023. Record the journal entry to pay the semi-annual interest payment and amortize the premium on Dec. 31, 2023. On September 1, 2026, Ellis calls the bonds at 99.  Record the journal entry to call the bonds. What is the total interest expense for the bonds for: One full year?   The entire 5-year life of the bond? (if the bond had been held until maturity)

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 70E
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Ellis issues $250,000, 6.5%, 5-year bonds dated January 1, 2023. The bonds pay interest semi-annually on June 30 and December 31. The bonds were issued at $255,330.

  1. Record the journal entry to issue the bonds on January 1, 2023.
  2. a. Record the journal entry to pay the semi-annual interest payment and amortize the premium on June 30, 2023.
  3. Record the journal entry to pay the semi-annual interest payment and amortize the premium on Dec. 31, 2023.
  4. On September 1, 2026, Ellis calls the bonds at 99.  Record the journal entry to call the bonds.
  5. What is the total interest expense for the bonds for:
  6. One full year?
  7.   The entire 5-year life of the bond? (if the bond had been held until maturity)  
  8. What is the carrying value of the bonds on:
  9.   December 31, 2023?
  10.   December 31, 2024?
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