Reference no: EM132475905

Point 1: Hambelton Ltd. issued $4,800,000 of 5% bonds payable on 1 September 2009 to yield 4%. Interest on the bonds is paid semi-annually and is payable each 28 February and 31 August. The bonds were dated 1 March 2008, and had an original term of five years. The accounting period ends on 31 December. The effective-interest method is used. (Use appropriate factor(s) from the tables provided.)

Required:

Question 1. Determine the price at which the bonds were issued. (Round time value factor to 5 decimal places. Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.)

Question 2. Prepare bond amortization table for the life of the bond. (Round time value factor to 5 decimal places. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Leave no cells blank - be certain to enter "0" wherever required.)

Question 3. Prepare journal entries to record the issuance of the bonds, payment of interest, and all necessary adjustments through to the end of 2010. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amount.)

Question 4. Calculate the interest expense that would be recorded in each of 2009 and 2010. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)

Question 5. Show how the bond would be presented on the statement of financial position as of 31 December 2009 and 2010. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)