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In: Accounting

Golf World, Inc., issued $320,000 par value 9% five-year bonds dated January 1, 2018 that will...

Golf World, Inc., issued $320,000 par value 9% five-year bonds dated January 1,

2018 that will pay interest semiannually on June 30 and December 31. These bonds were issued

at $332,989. The annual market rate is 8% on the issue date.

How can complete for 4 and 5 requirement information from above: Please including formulas and calculation.

4.   Golf World decided to retire the bonds early on January 1, 2020, at 105. Prepare the necessary journal entries to record this early retirement.

5.   Prove your numbers provided in the problem are correct by showing the table values you would have used to calculate this manually. This is how you will “show your work,” proving the Excel formulas were used correctly.

GOLF WORLD FIVE-YEAR BOND DATE Beginning
Carrying
Value		 Cash
Interest		 Interest
Expense		 Amortize Now Unamortized Premium Ending
Carrying Value
Bond face value              320,000 2018 Jan 1
Years 5 June 30
Contract rate 9% Dec 31
Market rate 8% 2019 June 30
dollar values table values PV . Dec 31
PRINCIPAL 2020 June 30
INTEREST Dec 31
n = 10                  -   2021 June 30
i = 4% Dec 31
2022 June 30
Dec 31
ADD EXCEL TOOLS REQUIREMENTS HERE
PV

Solutions

Expert Solution

Req 4.
Redemption value (3200*105) 336000
Less: Carrying value of bonds 328401
Loss on redemption 7599
Journal entry:
Bonds payable 320000
Premium on bonds payable Dr. 8401
Loss on retirement of bonds 7599
      Cash account 336000
Rreq 5.
Bond face value: 320000 Amort chart
Years: 5 yrs Date cash int Int expense Premium Unamortized Carrrying
Contract rate: 9% Amortized Premium Value of bonds
Market rate: 8% 01.01.18 12989 332989
30.06.18 14400 13320 1080 11909 331909
$ value Table value Present value 31.12.18 14400 13276 1124 10785 330785
Principal 320000 0.675564 216180.5 30.06.19 14400 13231 1169 9616 329616
Interest 14400 8.1109 116797 31.12.19 14400 13185 1215 8401 328401
n= 10 30.06.20 14400 13136 1264 7137 327137
I = 4% 31.12.20 14400 13085 1315 5822 325822
Issue price 332977.4 30.06.21 14400 13033 1367 4455 324455
31.12.21 14400 12978 1422 3033 323033
30.06.22 14400 12921 1479 1554 321554
31.12.22 14400 12846 1554 0 320000

ekkarill92 answered 1 year ago
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