On January 1, 2022, Cheyenne Company issued $1,400,000 face value, 7%, 10-year bonds at $1,503,035. This price resulted in a 6% effective-interest rate on the bonds. Cheyenne uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest on each January 1. Prepare the journal entries to record the following transactions. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.)1. The issuance of the bonds on January 1, 2022.2. Accrual of interest and amortization of the premium on December 31, 2022.3. The payment of interest on January 1, 2023.4. Accrual of interest and amortization of the premium on December 31, 2023.Show the proper long-term liabilities balance sheet presentation for the liability for bonds payable at December 31, 2023. Provide the answers to the following questions.1. What amount of interest expense is reported for 2023? (Round answer to 0 decimal places, e.g. 125.)Interest expense to be reported

1 on the issuance of a bond on January 1,2022 Particulars Debit Credit Bank a/c…

Answered: n January 1, 2022, Cheyenne Company…

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 15MCQ

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On January 1, 2022, Cheyenne Company issued $1,400,000 face value, 7%, 10-year bonds at $1,503,035. This price resulted in a 6% effective-interest rate on the bonds. Cheyenne uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest on each January 1.

Prepare the journal entries to record the following transactions. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

1.		The issuance of the bonds on January 1, 2022.
2.		Accrual of interest and amortization of the premium on December 31, 2022.
3.		The payment of interest on January 1, 2023.
4.		Accrual of interest and amortization of the premium on December 31, 2023.

Show the proper long-term liabilities balance sheet presentation for the liability for bonds payable at December 31, 2023.

Provide the answers to the following questions.

1. What amount of interest expense is reported for 2023? (Round answer to 0 decimal places, e.g. 125.)

Interest expense to be reported

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