[reo]

Please don’t just give me the answer, but also show/explain how you came to that conclusion. Any and all help is appreciated, thank you! How do I approach A, B, and C? It has been awhile . . .

Venezuela Co. is building a new hockey arena at a cost of $3,000,000. It received a down

payment of $600,000 from local businesses to support the project, and now needs to

borrow $2,400,000 to complete the project. It therefore decides to issue

$2,400,000 of 6%, 10 year bonds. These bonds were issued on January 1, 2014, and pay

interest annually on each January 1, starting January 1, 2015. The bonds yield 8%.

Venezuela paid $12,000 in bond issue costs related to the bond sale.

a) Prepare the journal entry to record the issuance of the bonds and the related bond

issue costs incurred on January 1, 2014.

b) Prepare a bond amortization schedule up to and including January 1, 2018, using the

effective interest method.

c) Assume that on July 1, 2017, Venezuela Co. redeems half of the bonds at a cost of

$1,140,000 plus accrued interest. Prepare the journal entry to record this redemption.

Reo

[Dantrick]

What does the cost of the arena and the down payment have to do with the problem? I don't know how to do C, so that is a good question.

[Author]

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