On January 1, 2018, Irik Corporation issued $2,550,000 face value, 7%, 10-year bonds at $2,378,893. This price resulted in an effective-
interest rate of 8% on the bonds. The bonds pay annual interest, each January 1.
Prepare the journal entry to record the issue of the bonds on January 1, 2018. (Credit account titles are automatically indented when the
amount is entered. Do not indent manually.)
Account Titles and Explanation
Jan. 1, 2018
Debit
Credit
Prepare an amortization table through December 31, 2021 (three interest periods) for this bond issue. Decemriods) for this bond issue. December 31 is the company's
year-end. (Round answers to the nearest whole dollar, e.g. 5,275.)
IRIK CORPORATION
Bond Discount Amortization
Effective-Interest Method - Annual Interest Payments
Discount
Amor-
tization
Interest
Annual
Interest
Expense
Interest
Periods
to Be
Paid
to Be
Recorded
Issue date-Jan. 1/18
1-Jan. 1/19
$
2-Jan. 1/20
3-Jan. 1/21
$
Unamor-
tized
Discount
Bond
Carrying
Amount
$
$
Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, 2018. (Credit account
titles are automatically indented when the amount is entered. Do not indent manually. Round answers to the nearest whole dollar, eg. 5,275.)
Date
Account Titles and Explanation
Dec. 31, 2018
Debit
Credit
Prepare the journal entry to record the payment of interest on January 1, 2019. (Credit account titles are automatically indented when the
amount is entered. Do not indent manually. Round answers to the nearest whole dollar, eg. 5,275.)
Date
Account Titles and Explanation
Jan. 1, 2019
Debit
Credit
Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, 2019. (Credit account
titles are automatically indented when the amount is entered. Do not indent manually. Round answers to the nearest whole doilar, eg. 5,275.)
Date
Account Titles and Explanation
Dec. 31, 2019
Debit
Credit