Question

In: Accounting

Continental Company is building a new hockey arena at a cost of $2,500,000. It received a...

Continental Company is building a new hockey arena at a cost of $2,500,000. It received a downpayment of $500,000 from local businesses to support the project and now needs to borrow $2,000,000 to complete the project. It therefore decides to issue $2,000,000 of 11%, callable, 10-year bonds. These bonds were issued on January 2018 and pay interest on January 1 and July 1. The bonds yield 10%.

Instructions:

  1. Prepare the journal entry to record the issuance of the bonds on January 1, 2018
  2. Prepare a bond amortixation schedule up to and including January 1, 2022
  3. Prepare the journal entries to record the interest payments on January 1, 2020 and January 1, 2021.
  4. Prepare the journal entry to record the bond called on January 2021 at 106

please use excel

Solutions

Expert Solution

ekkarill92 answered 2 years ago
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