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Pina Co. is building a new hockey arena at a cost of $2,680,000. It received a downpayment of $500,000 from local businesses to support the project, and now needs to borrow $2,180,000 to complete the project. It therefore decides to issue $2,180,000 of 10.0%, 10-year bonds. These bonds were issued on January 1, 2024, and pay interest annually on each January 1. The bonds yield 99%.

Pina Co. is building a new hockey arena at a cost of $2,680,000. It received a downpayment of $500,000 from local businesses to support the project, and now needs to borrow $2,180,000 to complete the project. It therefore decides to issue $2,180,000 of 10.0%, 10-year bonds. These bonds were issued on January 1, 2024, and pay interest annually on each January 1. The bonds yield 99%.

Cornerstones of Financial Accounting
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 96PSA
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Qq.10.

(b) Prepare a bond amortization schedule up to and including January 1, 2028, using the effective-interest method. (Round present value factor to 5 decimal places, eg. 1.24356 and final answers to 0 decimal places, eg. 38,548.) Date 1/1/24 1/1/25 1/1/26 1/1/27 1/1/28 $ Cash Paid $ Interest Expense Premium Amortization
Transcribed Image Text:(b) Prepare a bond amortization schedule up to and including January 1, 2028, using the effective-interest method. (Round present value factor to 5 decimal places, eg. 1.24356 and final answers to 0 decimal places, eg. 38,548.) Date 1/1/24 1/1/25 1/1/26 1/1/27 1/1/28 $ Cash Paid $ Interest Expense Premium Amortization
Pina Co. is building a new hockey arena at a cost of $2,680,000. It received a downpayment of $500,000 from local businesses to support the project, and now needs to borrow $2,180,000 to complete the project. It therefore decides to issue $2,180,000 of 10.0%, 10-year bonds. These bonds were issued on January 1, 2024, and pay interest annually on each January 1. The bonds yield 9%. Click here to view factor table. (a) Your answer is correct. Prepare the journal entry to record the issuance of the bonds on January 1, 2024. (Round present value factor calculations to 5 decimal places, eg 125124 and the final answer to O decimal places, eg. 58,971. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation January 1,2024 Cash Premium on Bonds Payable Bonds Payable eTextbook and Media List of Accounts Debit 2319904 Credit 139904 2180000 Attempts: 1 of 5 used
Transcribed Image Text:Pina Co. is building a new hockey arena at a cost of $2,680,000. It received a downpayment of $500,000 from local businesses to support the project, and now needs to borrow $2,180,000 to complete the project. It therefore decides to issue $2,180,000 of 10.0%, 10-year bonds. These bonds were issued on January 1, 2024, and pay interest annually on each January 1. The bonds yield 9%. Click here to view factor table. (a) Your answer is correct. Prepare the journal entry to record the issuance of the bonds on January 1, 2024. (Round present value factor calculations to 5 decimal places, eg 125124 and the final answer to O decimal places, eg. 58,971. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation January 1,2024 Cash Premium on Bonds Payable Bonds Payable eTextbook and Media List of Accounts Debit 2319904 Credit 139904 2180000 Attempts: 1 of 5 used
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