161.On January 1, Year 1, Kennard Co. issued $2,000,000, 5%, 10-year bonds, with interest payable on June 30 andDecember 31 to yield 6%. Use the following format and round figures to nearest dollar.
The bonds were issued for $1,851,234.
1.Prepare an amortization schedule for Year 1 and Year 2 using the effective interest rate method.
DateCash PaidInterest ExpenseAmortizationBond Carry Value
2.Show how this bond would be reported on the balance sheet at December 31, Year 2.
162.On January 1, Marshall Co. issued a $360,000, 3-year, 6% installment note payable with payments of $120,000principal and interest due on January 1 for each of the next 3 years.
1.Prepare the adjusting journal entry to accrue interest at December 31, Year 2.
2.Show the account(s) and amount(s) and where they will appear on a classified balance sheet prepared on
December 31, Year 2.
163.Given the following data, determine the number of times interest charges are earned ratio.
Net income, $70,000
Bonds payable,issued at face value, 8%, $5,000,000
Preferred Stock, $50 par value, 6%, 10,000 shares issued & outstandingTax rate is 30%