Untitled Question 12 points Preston Co. is building a new football arena at a cost...
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Untitled Question 12 points Preston Co. is building a new football arena at a cost of $2,500,000. It received a down payment of $500,000 from local businesses to support the project and needed to borrow $2,000,000 to complete the project. It therefore decided to issue $2,000,000 of 10%, 5-year bonds. These bonds were issued on January 1, 2020 and pay interest annually on January 1. The bonds yield 8%. Preston closes its books on December 31 and uses the effective-interest method. (Round all computations to nearest dollar) Instructions: (4+2+6) (a) Prepare the journal entry to record the issuance of the bonds and other journals related to the bonds for the year 2020 (b) Prepare a bond amortization schedule up to and including January 1, 2023, using the effective interest method (c) Assume that on July 1, 2022, Preston Co. buys back $800,000 worth of bands for $860,000 (includes accrued interest). Prepare the journal entries to record the payment of accrued interests and the retirement of bonds on July 1, 2021. 1 PVP (1+0)" PVOAF = = [1 -1 +on+i 1 () 1 Add file
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