Otter Products Inc. issued bonds on January 1, 2019. Interest is to be paid semi-annually. Other information is as follows: Term in years: 2 Face value of bonds issued: $200,000 Issue price: $206,000 Specified interest rate each payment period: 6% Required: Calculate: a. The amount of interest paid in cash every payment period. b. The amount of amortization to be recorded at each interest payment date (use the straight-line method). Amortization Table A B C D E (A + D) Year Period ending Beg. bond carrying amount Periodic interest expense Actual cash interest paid Periodic discount (prem.) amort. Ending bond carrying amount 2019 Jun. 30 Dec. 31 2020 Jun. 30 Dec. 31 2021 Jun. 30 Dec. 31 Calculate the actual interest rate under the straight-line method of amortization for each six-month period. Round all percentage calculations to two decimal placed. Use the following format: A B Six month period ending Bond carrying amount Six-month interest expense Year 2019 Jun. 30 Dec. 31 2020 Jun. 30 Dec. 31 2021 Jun. 30 Dec. 31 Prepare the journal entry for December 31, 2019.
Otter Products Inc. issued bonds on January 1, 2019. Interest is to be paid semi-annually. Other information is as follows: Term in years: 2 Face value of bonds issued: $200,000 Issue price: $206,000 Specified interest rate each payment period: 6% Required: Calculate: a. The amount of interest paid in cash every payment period. b. The amount of amortization to be recorded at each interest payment date (use the straight-line method). Amortization Table A B C D E (A + D) Year Period ending Beg. bond carrying amount Periodic interest expense Actual cash interest paid Periodic discount (prem.) amort. Ending bond carrying amount 2019 Jun. 30 Dec. 31 2020 Jun. 30 Dec. 31 2021 Jun. 30 Dec. 31 Calculate the actual interest rate under the straight-line method of amortization for each six-month period. Round all percentage calculations to two decimal placed. Use the following format: A B Six month period ending Bond carrying amount Six-month interest expense Year 2019 Jun. 30 Dec. 31 2020 Jun. 30 Dec. 31 2021 Jun. 30 Dec. 31 Prepare the journal entry for December 31, 2019.
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
ChapterMB: Model-building Problems
Section: Chapter Questions
Problem 13M
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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| Otter Products Inc. issued bonds on January 1, 2019. Interest is to be paid semi-annually. Other information is as follows: |
| Term in years: | 2 | ||||||||||
| Face |
$200,000 | ||||||||||
| Issue price: | $206,000 | ||||||||||
| Specified interest rate each payment period: | 6% | ||||||||||
| Required: | |||||||||||
| Calculate: | |||||||||||
| a. The amount of interest paid in cash every payment period. | |||||||||||
| b. The amount of amortization to be recorded at each interest payment date (use the straight-line method). | |||||||||||
|
|
| Amortization Table | ||||||||||||
| A | B | C | D | E | ||||||||
| (A + D) | ||||||||||||
| Year | Period ending | Beg. bond carrying amount | Periodic interest expense | Actual cash interest paid | Periodic discount (prem.) amort. | Ending bond carrying amount | ||||||
| 2019 | Jun. 30 | |||||||||||
| Dec. 31 | ||||||||||||
| 2020 | Jun. 30 | |||||||||||
| Dec. 31 | ||||||||||||
| 2021 | Jun. 30 | |||||||||||
| Dec. 31 | ||||||||||||
| Calculate the actual interest rate under the straight-line method of amortization for each six-month period. Round all percentage calculations to two decimal placed. Use the following format: | ||||||||||||
| A | B | |||||||||||
| Six month period ending | Bond carrying amount | Six-month interest expense | ||||||||||
| Year | ||||||||||||
| 2019 | Jun. 30 | |||||||||||
| Dec. 31 | ||||||||||||
| 2020 | Jun. 30 | |||||||||||
| Dec. 31 | ||||||||||||
| 2021 | Jun. 30 | |||||||||||
| Dec. 31 | ||||||||||||
| Prepare the |
||||||||||||
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