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Problem 14-2
Headland Co. is building a new hockey arena at a cost of \$2,370,000. It received a downpayment of
\$520,000 from local businesses to support the project, and now needs to borrow \$1,850,000 to
complete the project. It therefore decides to issue \$1,850,000 of 10%, 10-year bonds. These bonds
were issued on January 1, 2016, and pay interest annually on each January 1. The bonds yield 9%. Prepare the journal entry to record the issuance of the bonds on January 1, 2016. (Round present
value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0
decimal places e.g. 58,971. If no entry is required, select &quot;No Entry&quot; for the account
titles and enter 0 for the amounts. Credit account titles are automatically indented when
amount is entered. Do not indent manually.)
Account Titles and
Explanation Date Debit Credit January 1, 2016 Prepare a bond amortization schedule up to and including January 1, 2020, using the effective
interest method. (Round answers to 0 decimal places, e.g. 38,548.) Date Cash
Paid Interest
Expense