MBA 600 amortization project SOLVED:

MBA 600 amortization project SOLVED:

MBA 600 amortization project


Instructions: You must complete your work in Excel and it is due the end of week 9. Please submit your Excel file as an attachment to an email to your instructor. Bond interest and discount amortization. Logan Corporation issued $800,000 of 8% bonds on October 1, 2011, due on October 1, 2016. The interest is to be paid twice a year on April 1 and October 1. The bonds were sold to yield 10% effective annual interest. Logan Corporation closes its books annually on December 31. Instructions (a) Complete an amortization schedule for the above bond (for all periods) in a similar format as below. (Round all answers to the nearest dollar.) Use the effective-interest method. Date Credit Cash Debit Interest Expense Credit Bond Discount Carrying Amount of Bonds October 1, 2011 $738,224 April 1, 2012 ….continue schedule (use Excel) (b) Prepare the journal entries for the following: 1. October 1, 2011 bond issue 2. Adjusting entry for December 31, 2011 (adjusting entry should cover 3 months) 3. April 1, 2012 entry 4. October 1, 2012 entry 5. Adjusting entry from December 31, 2012 (c) Compute the interest expense to be reported in the income statement for the year ended December 31, 2011 and December 31, 2012.
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