Reference no: EM132381118
Exercise
On January 1, 2017, Novak Company sold 11% bonds having a maturity value of $450,000 for $467,058, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2017, and mature January 1, 2022, with interest payable December 31 of each year. Novak Company allocates interest and unamortized discount or premium on the effective-interest basis.
Prepare the journal entry at the date of the bond issuance. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Prepare the journal entry to record the interest payment and the amortization for 2017. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Prepare a schedule of interest expense and bond amortization for 2017-2019. (Round answer to 0 decimal places, e.g. 38,548.)
Prepare the journal entry to record the interest payment and the amortization for 2019. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
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