ACCT 3321-Intermediate Accounting I



The University of Texas at El Paso

College of Business Administration, Department of Accounting

ACCT 3322-Intermediate Accounting II

In-Class Exercise ICC14a, Spring Semester 2005

Bonds Payable

On April 1, 2000, Spencer Company issued $900,000, 12%, 5-Year bonds dated January 1, 2000. Interest is paid on January 1 and July 1. The bonds were sold to yield 10% interest (the current market rate of interest). The bond issue costs were $90,000.

1. Using the format provided calculate the bond issue price.

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2. Using the format provided calculate the accrued interest on the date of the sale of the bonds.

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3. Using the format provided prepare the journal entry to record the sale of the bonds.

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4. Using the format provided prepare the journal entry to record bond issue costs.

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5. Using the format provided prepare an amortization table through January 1, 2002.

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6. Using the format provided prepare the journal entry to record the first payment of interest and amortization of premium on July 1, 2000.

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7. Spencer Company has a fiscal year-end of September 30th. In the format provided prepare the journal entry to accrue interest expense and amortization of premium through September 30, 2000.

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8. In the format provided prepare the journal entry to amortize the unamortized bond issue costs through the fiscal year end, September 30, 2000.

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